The other big thing is - even assuming you can scale up your income and work slightly more if you want to - the additional value of each dollar earned is not $1, it is $0.48-$0.60 for most people in this thread. I wrote a bit of an explanation downthread if anyone's curious (https://news.ycombinator.com/item?id=25382210)

I disagree. Putting a dollar amount on your free time is a very smart thing to do. When I hire someone to clean my house I don't do it with the expectation that I am saving money, but that the amount I am spending to steal more time away from something I don't enjoy is 100% worth it.

This is all true, but the point is that hiring someone to clean your house is a purchase, not a way to increase your income. If your wage is $60/hour, that doesn't mean you're "losing money" if you clean your house rather than pay someone $30/hour to do it. For most people, cleaning their house doesn't have any impact on their income. If you're broke, it may very well make sense to clean your house yourself even if someone else is willing to do it for $1/hour and you make $20/hour.

> If you're broke, it may very well make sense to clean your house yourself even if someone else is willing to do it for $1/hour and you make $20/hour.

Unlikely.

I could clean instead of spending $1/hour... or I could spend $1/hour and then use that extra free time figuring out how to improve my skills (and thus earning potential) or find a better job that pays more (thus better leveraging my existing earning potential) or even just to recharge (and thus be able to work harder - earning future raises in the process as my hard work is noticed.) These aren't as direct and immediate as literally being able to immediately work more hours as a freelance contractor, but are no less invalid a means of improving my profits in the long run, even if it means more short term debt.

I'm certain I could drum up extra work or self improvement for myself that has a higher return on investment than $1/hour now. I very strongly suspect most people who earn $20/hour or more can. Borrow a mower! Offer to clean other people's houses for $2/hour! Then, after an hour of cleaning someone else's house instead of your own, you'll be out the same amount of work but have pocketed an extra $1 in the process!

A valid point is raised here: Just because you've profited in extra free time, doesn't mean you'll convert said free time into additional $$$ at your job's hourly rate. You might earn less. However, you might earn more over the long term, by investing in your future in a way that results in compounding profits. A broke college student might reasonably still end up spending $1/hour on a cleaner, so they can have more time to study! Even if that means more debt, and even if their current unpaid internship pays them $0/hour!

I agree with both the parent and gp parents to some extent. I put a dollar amount on my free time, although for most people I think it's a mistake to say that the value of my time is $salary/(40*52)

However if you work a salaried job, saving an hour on cleaning won't necessarily increase your income by $salary/2080. Maybe if I spent that time working I'd get a bonus or something, but the hours have diminishing returns.

On the other hand, I used to work at a job where I could choose to work overtime, so it was true to say that if I paid $X more in monthly rent to shorten my daily commute by Z minutes I could treat it as an "investment" by working an extra Z minutes per day.

I agree with your point

Sounds like you're living to make money rather than making money to live, which is a pretty perverse attitude IMO.

Your time is worth what you will pay for it as well as what other people will pay for it. Hiring house cleaners or dining out lets me buy time more cheaply than buying it by sacrificing salary (because I would have to take a more than 20% pay cut to get a 4-day week).

Having been on exactly the hourly pay schedule you mention, I still kind of hated the “what is your time worth” question because I could never justify things like cooking my own food so I should order 100% of meals delivered and work 12 hour days never leaving the office.

If you enjoy it, that's something that has value. The point of earning money is to buy things you enjoy with it. There's nothing wrong with forgoing income to acquire something you enjoy rather than spending income on something you enjoy.

Even from a theoretical microeconomics viewpoint, that's an entirely rational decision. Homo economicus maximizes utility, not money.

Well you don't have to coldly optimise for personal finance, you can accept that you hate that, don't want to do it, while still recognising it's net financial advantage: the difference is just the price (opportunity cost) you pay for not living in an optional but undesirable manner.

You actually can justify cooking your own meals if you are preparing them in bulk.

If you cook several meals in one session, the average time per meal is much lower, and becomes faster than spending time to scroll through an app placing an order for a meal every time you want to eat.

I like the idea of bulk cooking in theory but I’ve found that in a small apartment kitchen the sweet spot for everything from pots to storage containers is 2-4 portions. Going over that gets awkward in juggling storage containers, excessive cleaning time pretty quickly.

Probably need a bigger apartment. Small studio-like apartments are mostly a place for people to lay their head down to rest before going back out into a city to live the rest of their daily life. Not really a place where one could hunker down for extended periods of time.

Its a 1br, but I couldn’t agree more. Getting out soon.

No salaried person believes hiring house cleaners saves them money. But this thinking can help optimize the dual variables of net income & daily leisure hours.

>A common beginner mistake I see on finance forums is when people calculate some notional hourly wage for their time, usually from their salary divided by working hours in a year, and then use that to justify any time saving purchase they want to make.

I see people talking about "what's your time worth" on hobby forums all the f-ing time. At this point I just assume they're justifying laziness because that's what it is far more often than not.

Interestingly enough, you pretty much never see people who are self employed and could be booking billable hours instead of doing other things invoking the "value of my time" argument for doing or not doing things.

For a brief period of time, when I was talking a lot with freelancers, I made this mistake as well! But I am a fulltime employee so it didn't take long to realize of my mistake.

For very long chunks of time it could still make sense to me if I was to pick up a sidegig, like if I could save 10h/week somehow. But saving 1-2h/week, if you don't make money that time, is not worth it (economically!). You might still hate the task or it has a high risk so you decide to hire someone to do it for you, that's fine. But no more "it's less than my rate", if I'm not freelancing I don't have a rate, period.

Would you work longer hours at the same hourly rate if you could? I'd work shorter hours at my current hourly rate if I could, which means my time is worth more than my notional "rate", not less.

Yes, I would

Out of curiosity, I've just computed how much time do I would have to work to pay someone to clean my apartment and it turns out it's... 9 minutes. It's an amusing number, but ultimately not that relevant, as doing the cleaning yourself has many advantages that are hard to quantify (which is why I prefer to do it).

I think this is even pushed by the idea like 4 Hour Workweek and some other self-help books.