Free Money Finance

Costs of Commuting

Personal Capital lists the surprising costs of commuting. The author begins with this story:

I usually leave the house each morning at 6:50. I hop in the car and drive to the train station, usually getting there around 7:05. I spend eight minutes waiting on the platform, using that time to catch up on news or download a podcast for my train ride. My train arrives at 7:13, and I get off at 8:02. From the train station, I walk 1.2 miles to the office, usually arriving by 8:30. My total commute time? An hour and forty minutes, one way.

Ugh. How brutal is that? An hour and forty minutes each way. This would not be living for me.

They then give some stats on commuting:

About 3.5 million Americans are also extreme commuters, averaging more than ninety minutes each way. One in six spends more than forty-five minutes commuting each way, while the average American spends about twenty-four minutes.

The post then weighs the cons of commuting (of which there are many) versus the pros (which is basically to buy a house you can afford -- and to live in a "nicer area" I assume as well). The piece ends up where it began IMO -- there's no way a long commute would work for me.

We just went through this decision-making process a few months ago. When we moved to our new city, people we knew here as well as those we knew who had friends/family here told us to check out one particular part of the city. Sure enough, it was great. It was new, vibrant, and was an awesome place to live. The problem? It was in the northeast part of the city and my work was in the southwest. The drive would be 30 minutes one way on a good day, but there were often traffic issues on the interstate (winter storms, spring storms, accidents, etc.) which made the commute an hour or longer in bumper-to-bumper traffic.

Despite these facts, we still considered the "great place" up north. But not for long. Why? Because we did the math. 30 minutes each way was an hour a day in the car (at a minimum.) Five hours a week. 250 hours (10.4 days) a year. And that's if traffic was always good.

So we started looking at a place closer to work and discovered many good options. They weren't as "great" as the place up north, but they were good. Very good in fact. We settled on a spot in an awesome school district in a new subdivision that was five minutes from work. I could walk it in 30 minutes or less if I had to. Do the math on that one. Do you know how much time, effort, frustration, etc. -- not to mention cost -- I saved? A ton.

What made the difference is that one option forced me to lose a lot of time with my family. The other was the shortest commute I've had in my career. No brainer.

Coming back from a business trip a month ago I was going the opposite way of what my commute home would have been if I had moved up north. There was a small fender bender and one car was on the side of the road. The traffic was backed up for MILES! I just smiled to myself, thankful that my commute is what it is.

All this to say that I feel one of the greatest costs, if not the greatest, of commuting is the time spent. It's one that needs to be looked at and considered just as much as the hard costs (gas, maintenance, etc.) do.

What do you think?

Time Becomes Even More Important

I've had a category here at FMF called "More Important than Money" for quite some time (though I haven't posted to it for a while.) But when I was posting regularly on the subject one of the things I had listed as more important than money was time (in fact, I even started a "time" category).

The rest of the world has varying opinions on the value of time versus money, but it appears that more and more people are considering the two at least equals. This piece from US News basically is an article on how people are seeing that the rat race is for rats and that they are willing to trade some of the "things" in life for more time (and enjoyment.)

I think that the financial crisis has somehow disillusioned many people from the "make-more-money-to-buy-more-things" attitude that many Americans held just a few years ago. They are seeing that finances can be fleeting and are re-looking at their priorities. And they are finding that they actually would prefer to have a bit more free time than a few extra dollars.

If you're in the same boat, these posts may be helpful as you sort out what the time/money trade-off is in your own life:

• Creating A Richer Life While Living On A Tight Budget


• Taking Control of Your Time


• How to Maintain Balance in Your Life While Making Major Financial Change


• Aligning Your Money and Your Values

Valuing Time in Home Repairs

US News lists several instances when you should forego a DIY home repair and hire a professional instead. Their basic thinking is that sometimes it can/will end up costing you more to try and do it yourself (because you make it worse or simply waste money to find out you can't fix it after all) than if you hired a professional. And in some cases (like messing with electricity) hiring a professional can be a safety precaution.

I'm not particularly handy when it comes to home repairs. Sure, I can do the simple, basic stuff, but much more than that, and I'm over my head. In addition, I always look at the time and frustration factor to help determine whether or not we should hire someone to do the job.

Here's an example:

• Task: power washing our deck
• My boss has a power-washer we could use if we wanted to
• But I'd have to haul it over to our place, set it up, do the job, then take it back
• We have a friend that does power-washes decks for $50
• It's worth $50 for me not to have to do the project (time and frustration factor), so I hire it out.

Here's another one:

• Task: Painting our bathroom
• I could buy the paint, then spend a whole weekend (or more) taking the wallpaper off the wall, patching any problems, and painting the room
• Or I could hire a friend who's a painter (and does a great job) to do it for $500
• He gets the (needed) business and I save 20, 30 or more hours of my life (not to mention the frustration of doing it myself)
• So for me, it's a good deal to pay someone else to do it.

And another one:

• Task: Landscaping
• Over the past two years we've done a lot in our yard (new plantings, several trees taken down, drainage put in our backyard woods, rock hauled in various places, etc.)
• Could I have done this myself? Some of it. But not all of it (especially the tree stuff.)
• Would I have gotten it done in two summers? No, it would probably have been a four-summer effort if I did it myself (just to find the time and motivation to do it.)
• Would it have been as good as what was done? No way. Not even close.
• Now it was pricey -- we spent $3k over two summers. But to me, this was well worth the cost in simply getting it done quickly and done well.
• In addition, I hired a friend with a landscaping company whose business is down a bit in this economy to do it, so it helped him out too.

And we've recently found a guy who does all sorts of home repairs at VERY reasonable prices (he just did a $500 repair job for us that another guy wanted $1,000 for), so it looks like it will be an even better trade-off on time versus money in the future. Trouble is, the new guy is very busy and hard to book. So we'll plan to contact him well in advance for any work we need done.

How about you? Do any of you consider the cost of time and the "frustration factor" when you decide whether or not to do home repairs yourself?

Taking Control of Your Time

The following is an excerpt from The Other 8 Hours: Maximize Your Free Time to Create New Wealth & Purpose by Robert Pagliarini. Copyright © 2010 Other 8 Hours, LLC All Rights Reserved. The book tells people to live life to the fullest by radically changing the way they spend “The Other 8 Hours” – the 8 hours not spent sleeping or working.

We’re going to dissect your average day and look for time wasters we can eliminate, non-critical tasks we can reduce, and pockets of opportunity we can seize.  You can either create your own form or you can download one from other8.com.

Step 1 – Big Picture

Time is the great equalizer. The big shot CEO who oozes money, power, and success doesn’t have any more hours in the day than the single and overworked mother bartending at the club downtown. It’s not how much time they have—they both have the same—it is how they invest their time that makes the difference.

The reality is that few of us actually have a full 8 hours available. It takes time to get ready in the morning, drive to work, eat, pee, and mow the lawn. Nobody is forcing us to mow the lawn, but we need to do it anyway.

So, what do you do during the other 8 hours? I’m sure some of this time is put to good use and some of it is wasted.  The only way to know for sure is to take inventory of the way you spend your time.  Complete the exercise below but keep in mind the following tips before you get started…

• Guess. This ain’t NASA, folks. Put down the calculator. We’re just trying to get a rough idea about where your typical day goes.
• Include only workdays. Don’t include weekends. Unless you work on the weekends, those days are all yours!
• Average it out. If you workout three days a week for an hour, calculate the average per day by turning the hours into minutes (3 hours x 60 minutes = 180 minutes), and then divide by 5 days (180 minutes ÷ 5 days = 36 minutes) to get the average minutes per day. (Yes, I know I just told you to put away your calculator).
• Don’t cheat. This is a tool to help you determine how you actually spend your time, not how you’d like to spend your time (we’ll get to that later). So, if your goal is to workout for an hour three days a week, but you never do it, time spent exercising would be zero.
• Pick the primary task. Most people do several things at once. For example, you might call a friend while driving to work or read a magazine while on the Elliptical. How should you count this time? Only count the primary task. So, for our examples, you’d count your time as spent “driving” and “exercising.”

List the amount of time you spend:

• Sleeping/Napping – Time you spend sleeping or lying down with the intent to sleep. Time dozing off during meetings doesn’t count.
• Work – Time at work. Notice I didn’t say time spent working, since this would be a very different number compared to time spent at work. Count lunch and breaks as “work.”
• Driving – Basically any time you are in your car going somewhere: commuting, dropping kids off at soccer, running errands, etc.
• Meals/Snacks – This includes not only eating food but also preparing it and cleaning up. Don’t include shopping here; we’ll get to that below.
• Personal – This is a big category. It includes things such as showering, using the bathroom, getting dressed, and having sex as well as the G-rated, boring things you do such as getting your hair cut, nails done, massage, etc.
• Exercise – Time at the gym, walking, biking, stretching, etc.
• Watching TV – Obviously includes time spent watching TV and movies at home and in the theater.
• Personal growth – Time spent reading, learning, planning your future, taking courses, etc.
• Home maintenance – Includes grocery shopping, bill paying, phone calls to plumbers, etc.
• Family – Time with spouse/partner and/or kids when you are really engaged with them. Watching Dora the Explorer with your three year old would not be considered “family” time.
• Spirituality – Time spent at church/temple, in Bible study, in small spiritual groups, praying, meditating, etc.
• Helping – All the time you spend working and helping others without pay such as volunteering, helping your neighbor, mowing your grandma’s lawn, etc.
• Socializing – Time with friends, talking on the phone, texting, at parties, etc.
• Kids School – Any time spent in PTA meetings, school conferences, working in the football concession stand, etc.
• Other leisure. This is a catch-all category for everything else such as surfing the internet, listening to music, blogging, etc.   

Step 2 – Tasks

Within each time category (e.g., Socializing), write down all the things you do during this time. For example, talking on the phone, meeting friends for coffee, texting, emailing, etc. Try to think about all of the tasks within each category. As another example, let’s say you watch four hours of TV a night. List the shows you watch.

Step 3 – Time spent on each task 

Next, write down approximately how much time you spend on each task. Do you watch the local evening news for an hour each night? Do you blog for 30 minutes a day? 

Step 4 – PERK:  Postpone, Eliminate, Reduce, or Keep

This is where things get interesting. For every task you must select from one of the following:  Postpone, Eliminate, Reduce, or Keep.

• Postpone – This is when you can shift the expense into the future.  For example, to create free time to complete a project, gain a new skill, take a class, etc., you might want to hit the “pause” button on another task. For me, I really want to become fluent in Spanish but I also wanted to write this book. I could have done both, but it would have taken a lot longer to write the book and to learn Spanish. I made a conscious decision to Postpone Spanish to focus more time on the book.

Go through each of your tasks and see if you can postpone any of them. If you can, you will free up valuable time to focus on your more important goals.

• Eliminate – This means you can completely remove this task from your life. I want you to start cutting and slashing like a machete-wielding tribesman going through a jungle. Buh-bye. What can you eliminate? Better yet, what can’t you eliminate? We do so much crap and make so many commitments that our natural reaction is to protest that we can’t eliminate anything. But doing what you’ve always done will get you what you’ve always got. Don’t be a big wuss. Start eliminating. Will you die if you cancel your Twitter account or if you stop watching Lost?  For those things that you can’t bring yourself to eliminate entirely, decide to just eliminate them for three weeks. If at the end of the three weeks you want to resurrect the task, go for it.

• Reduce – Maybe you just can’t bring yourself to completely eliminate something, but can you reduce it? Absolutely. Go through your tasks and ask yourself if you really need to spend that much time on it. Can you cut it back a bit? You can reclaim so much of your life just by reducing unimportant and unsatisfying tasks. There’s probably something in your life that sucks up your time that you could eliminate or reduce. Maybe it’s fantasy football, TMZ.com, celebrity gossip websites, YouTube, or MySpace?

• Keep – Undoubtedly there will be some tasks that you don’t want to eliminate, reduce, or postpone. That’s okay. For these, just check the “keep” column.

Problems with Traditional Financial Planning

The following is an excerpt from The Other 8 Hours: Maximize Your Free Time to Create New Wealth & Purpose by Robert Pagliarini. Copyright © 2010 Other 8 Hours, LLC All Rights Reserved. The book tells people to live life to the fullest by radically changing the way they spend “The Other 8 Hours” – the 8 hours not spent sleeping or working.

There are real and serious hurdles to overcome if we want a better financial life.  What’s the solution?  Well, the solution has been traditional financial planning.  The traditional approach to financial planning is pretty simple. Take away all of the jargon and fancy acronyms, and you’re left with just three factors:

(1)  Time—need a lot of it
(2)  Savings—need a lot of it
(3)  Investment Return—need a high rate

The traditional approach only works if you have Time + Savings + Return. If you lack any one of these pieces, and the Dead Broke usually lack most of these, you’re going to have a problem.

The limitations inherent in traditional financial planning run deep and have created a dilemma. It’s what I call Sophie’s New Choice. Should I skimp and save for the next 40 years so I can then squeak by in retirement or should I enjoy life a little now and pray I hit the lottery when I retire? These are our options? The choice is as subtle as Vinny asking, “Would you like it in the head or the chest?”  But traditional financial planning has other limitations too:

• Age-related issues. You don’t have to be Dr. Oz to know that the older we get, the more health issues we face. Aside from chicken pox and ear infections, I think every other health problem increases with age. This means that during our prime years—the years when we are the most vibrant and healthy, we are working and that when we retire our health begins to deteriorate. Also, as our years increase, our energy decreases. We don’t have the same bounce in our step as we age. One retiree said, “Now that I’ve finally got the ability, I don’t have the mobility.”

• Delayed gratification. Would you rather have a cupcake now or tomorrow? If you’re like most people, you want it now. Not just cupcakes, but everything—vacations, nice cars, security, time for hobbies, travel, etc. But our choice is not today or tomorrow. It is today or 40 years from now. That’s not delayed gratification, that’s nearly-impossible-to-imagine gratification!

• Late start. One of the three key ingredients in the traditional approach is time, and to succeed, you need a lot of it. The traditional approach just doesn’t work effectively if you start too late. If you’re 22 and diligently contributing 10% of your income to a 401(k), time is on your side. But if retirement is nearing and you don’t have anything saved, you’re not going to make it with traditional financial advice. Don’t take my word for it. Use any one of the retirement calculators online to see for yourself.

• Live to work. The pre-boomers had a job. The boomers had a career. The post-boomers want a calling. Those born after the boomers want to live to work, not work to live. They want to find meaning and significance in the work they do. Trading time for money just to pay the bills isn’t attractive to these generations.

• Retirement focused. Instead of looking at ways to improve life today, traditional financial planning focuses almost entirely on retirement, which could be 20, 30, or 40 years in the future. If you’re working overtime just to pay this month’s bills, you need solutions and strategies to live richer life now, not 40 years from now.

• Expense-only focus. Traditional financial planning focuses exclusively on just one side of the cash-flow equation—expenses. What can we reduce, eliminate, or postpone? How much can you sacrifice today for retirement 40 years from now? Reducing excess and unnecessary spending is absolutely critical, but traditional financial planning neglects the other side of the cash-flow equation—income! In addition to consuming less, we should also focus on boosting our income.

The traditional approach to improving finances and saving for retirement initially leaves most Americans confused and then, when they work through the numbers, frustrated. “How can I save for a distant future when I’m struggling to make ends meet right now?”  Traditional financial planning is like measuring a mile with a ruler—it can be done, but it is very time-consuming and you’re going to have one hell of a backache. This is why so many are saying forget it and instead, are choosing to spend today and ignore tomorrow. This feels good in the moment, but it is obviously a horrible long-term financial plan.

It’s easy to point fingers when someone is clearly living an extravagant lifestyle. Just tell them to cut back, right? Even though I’ve worked with a lot of people over the years, it is still frustrating to sit across from someone who earns a lot but spends lavishly and complains about their debt and their poor financial situation. That answer is simple. But it’s an entirely different situation when you’re sitting across from a couple who are in debt and struggling but they’ve already sacrificed and cut their expenses to the bone. Where are all of the financial planners and eager solutions for that couple?

Let’s be clear, I’m a big proponent of the traditional approach. I am a Certified Financial Planner.™ I have a Master’s degree in Financial Services. I am the president of a financial planning firm. I wrote a bestselling book based on the traditional approach. It can and does work. You should cover the basics and implement the traditional strategies to improve their finances, but you must temporarily forget about all of the traditional financial advice you’ve ever read or heard because it will prevent you from getting the life you want, and it will make you ineffective and frustrated.

Imagine you’re driving a car. Traditional financial planning advises you to conserve gas regardless of how uncomfortable or how much longer it makes the ride.  Of course, if that doesn’t work, you’ll be forced to choose a closer and less desirable destination, whether you like it or not. 

The assumption is that you’ve got a limited supply of gas so you have to make it last as long as possible. It doesn’t matter if it’s 100 degrees out and that you’re dying inside the car.  If you can drive a little farther by having your windows rolled up and your AC off, then that is a sacrifice you must make. The focus is on stretching your existing resources as much as possible, regardless of the sacrifice involved.

Traditional financial advice focuses on depriving, reducing, cutting, and eliminating. All the financial experts are hell bent on getting you to cut your expenses by shrinking your lifestyle. They want you to take your big goals and dreams and shrink them until they are shriveled and unrecognizable.  Stretching your resources is a good idea, but when the entire focus is on conservation, getting by, and making do, you lose the capacity to identify opportunities. Think about it. If you’re so focused on the dwindling gas gauge, you may not notice the six gas stations you just passed.

Fortunately, you have the other 8 hours.  In the coming chapters, you will learn a completely different approach. Instead of focusing all of your attention on how to stretch the limited gas you have, the goal will be to find a gas station so you can fill up. Do you see the difference?  You will learn to focus on your potential and what you can accomplish instead of on only what you currently have.

You want to grow, expand, achieve, and experience, but traditional rules tell you that you need to reduce, contract, and limit our life. I will show you how to jump out of the box you’ve been crammed into and to expand your means to fill your vision instead of shrinking your vision to fit your means.  

The other 8 hours are the best resource you have to radically improve your life and finances. The other 8 hours is time. Time you can invest to produce a bigger and better future than the present. Your first step to reclaiming your life and your finances is reclaiming your time—getting more of our 8 hours back and getting more out of them.

The Other 8 Hours

The following is an excerpt from The Other 8 Hours: Maximize Your Free Time to Create New Wealth & Purpose by Robert Pagliarini. Copyright © 2010 Other 8 Hours, LLC All Rights Reserved. The book tells people to live life to the fullest by radically changing the way they spend “The Other 8 Hours” – the 8 hours not spent sleeping or working.

Your day doesn’t start when you crawl out of bed. Your day—and even your life—doesn’t really start until 5:00PM.  What you’ve done with your time after 5:00PM last week, last month, and last year has determined where you are today. How you use the other 8 hours today, tomorrow, and next year will determine your future—they are your only hope to radically improve your life. The 8 hours you sleep are lost. The 8 hours you sell for a paycheck are gone. What you have—really, all you have—are the other 8 hours. Life not only happens in those the other 8 hours, but life is the other 8 hours.

Where you work, the size of your paycheck, the amount of debt you have, what you weigh, the number of people you can count on to help you in an emergency, your connection to God, the relationship you have with your spouse and children, and just about everything else that is meaningful to you is the result of how you’ve used the other 8 hours. 

Look at each of the areas below to see the profound effect the other 8 hours has had:

Family

Even if you met your partner/spouse at work (I did), you needed to put time and energy into it after work if you wanted it to grow and mature. The dates you went on, long walks, and falling in love all occurred during the other 8 hours. Even the disagreements and arguments that make you the couple you are today occurred after 5:00PM.

If you have children, surely their conception and maybe their birth occurred during the other 8 hours. All of the diapers you changed, Elmo you watched, and homework you’ve helped complete—all of the things you did to build connections with your children today—wouldn’t have happened if it were not for the other 8 hours.

The reason my daughter runs up and hugs me when I come home from work is because of the other 8 hours I’ve “invested” in her (then again, it’s probably the M&M’s I bribed her with).

The love (and yes, the lack of love) your spouse and children feel toward you are entirely because of how you have spent the other 8 hours. The connection you feel toward your siblings and parents are based largely on what you’ve done during the other 8 hours. If you invested them wisely, you probably have some good relationships. If you didn’t, you probably don’t.

Relationships

The 9 to 5 working hours are a great time to meet people and develop friendships.  I met most of my non-childhood friends while working. It’s no surprise. We come into contact with more people and for longer periods during working hours than we do at any other time of the day. But to convert your work relationships into real friendships, you have to spend some of your other 8 hours hanging out and getting to know those people on a different level. It’s one thing to chat about the latest American Idol contestant to be voted off around the water cooler or to relive Sunday’s big game in the lunchroom, but it’s an entirely different thing to share a drink or dinner with someone and really get to know them. Your close friends—regardless of where you met them—became your friends during the other 8 hours.

Physical Health

The notch you use in your belt, how out of breath you feel after climbing a flight of stairs, and how comfortable you are in a bathing suit are almost entirely dependent on how you have used the other 8 hours. What you choose to eat for breakfast, dinner, desert, and snacks are usually during the other 8 hours. If you’ve chosen wisely, it shows. Do you exercise? If so, when? While you sleep? No. While you work? No. During the other 8 hours? Yup.

Personal Growth

This category includes your hobbies, educational pursuits, travel, reading, art, and other activities that you find enriching and are passionate about. One of my hobbies is Brazilian Jiu Jitsu and mixed martial arts. I’m not very good, but I enjoy it and I’m better than when I started. I also enjoy learning Spanish (even though those verbs confuse me). Another of my favorite pastimes? Reading. My clients wouldn’t appreciate it, and I wouldn’t be very successful if I spent my hours between 9 and 5 practicing Jiu Jitsu, learning Spanish, and reading books. No, I can only do these things that I love and am passionate about—these things that help define me as a person—during the other 8 hours.

Spirituality

Your spirituality and faith should follow you wherever you go—during work and during the other 8 hours. But, unless your 9 to 5 job is in ministry, chances are your spiritual growth and deepest connection to God occur during church/temple, small group meetings, Bible study, chanting, volunteering, meditation, or whatever.

Financial Health

Surely your financial health is the direct result of the hours between 9 and 5. It is during this time that you work and earn a paycheck. Your paycheck determines your financial health, right? Not so fast. Obviously your working hours play a significant role in your finances, but you might be surprised at the role the other 8 hours play in the size of your bank account.

Your financial health is determined by just two things . . . your income and your expenses. That’s it. No more, no less. Your income is based on what you do for a living and how well you do it. The best sno-cone maker in the world may make a fine sno-cone, but her choice of occupation limits her financial success. Likewise, a brain surgeon who botches every surgery isn’t going to be very financially successful either.

What you do for a living is based on hundreds of factors . . . where you grew up, your intelligence, your parents’ encouragement, your personality, your interests, chance, etc. What you do for a living also depends on if you graduated high school, if you spent the extra years getting an advanced degree, if you took online courses or night classes to earn an important industry designation, how hard you studied, and your personal network of friends and acquaintances. It is these factors—those that you can control—that have a huge impact on what you do between the hours of 9 and 5.  And guess what? All of these other factors are the direct result of how you have spent the other 8 hours.

So the other 8 hours have a huge impact on our income, but what about the other half of the financial health equation . . . our expenses? You guessed it. Your expenses are the result of the decisions you make during the other 8 hours. How much you choose to spend on rent, the type of car you drive, the clothes you buy, the entertainment you experience, and the toys you purchase aren’t decisions you usually make while we are working, and they definitely aren’t decisions you make while sleeping. Every single one of these spending decisions—and thousand of others, both big and small—occur during the other 8 hours.

Still aren’t convinced?  I need you to buy into just how important the other 8 hours are. If you read this book with the same skepticism you have when you read those tabloid headlines in line at the grocery, it’s not going to work. Go ahead. Drink the Kool Aid.  Because once you do—once you realize the power the other 8 hours has had on your life—you will respect and appreciate the power that the other 8 hours can have on your life.

Outsourcing Chores Could Be a Good Investment

What's your time worth? That's the key question behind this piece on MSN Money that advocates outsourcing some chores. The summary:

Outsourcing chores by hiring a cleaning service or personal assistant might sound like the kind of splurge that a recession-era budget would quickly eliminate. But outsourcing certain household tasks can end up saving so much time and energy that the cost is well worth it -- as long as you use your newly freed-up time wisely.

Think about it this way:

• It costs you $100 to have your house cleaned.

• Paying to have it done saves you four hours.

• You use those four hours to earn an additional $500 that you wouldn't have had otherwise.

Sounds like a good investment, right?

An alternative scenario:

• You have a hectic lifestyle and thus have limited time with your family.

• You pay a lawn service $50 a week to cut your lawn.

• This saves you two hours of work that you instead spend with your family.

Assuming you can afford the $50, sounds like this can also be a "good deal."

Of course, life isn't often this clear-cut, but these serve as examples of the time/money trade-off.

Personally, we do more of the latter than of the former. For example, we recently hired a friend to paint a bathroom. For us to remove the wallpaper and paint the room would have been at least a weekend project, probably much more (that is, if we ever got to it -- the project has been sitting there for years.) Instead, we felt we could spend the $500, have a quality job done, help out a friend, and save ourselves a ton of time -- time that could be better spent elsewhere. We just did the same with our deck -- our friend stripped off the paint and stained it to our specs (it looks good as new!) We could have never done as good of a job and it could have been a summer-long project for us. Instead, we decided to "buy time" by having someone else do it.

How about you? How do you make the time/money trade-off decision?

How Do You Value Your Time?

Here's an interesting piece on how people should think about valuing their time. Here's a sense of what they're talking about:

If you make a sandwich at home instead of buying one at work, it may take you five minutes in the kitchen and save you $6. Is it worth it? That depends on how you value your time. To pocket $6 from five minutes' work is the equivalent of earning $72 an hour. And the savings are free of tax. That's a good wage. Yet judging by the local sandwich shops in any downtown area, lots of people would rather buy.

Should you sign up for a store credit card just to save 10% on your first day's purchases? It may take an hour -- including time on hold -- to get, pay off and eventually cancel the card. If you're spending $200, the savings may not be worth it. But if you're spending $1,000, they might be. Where's the cut-off point?

How about driving 20 minutes extra to get to the cheaper supermarket? If your time is worth $50 an hour after tax, you'll have to save about $17 to make it worth your while.

Clipping coupons is often associated with little old ladies buying cat food. But if 10 minutes' work saves $10 on groceries, that's $60 an hour after tax.

Should you take your family out for an $80 meal instead of making one at home? That depends on what your time is worth to you.

Obviously there is no magic number. The answer varies for everybody. But at least do the math. If you convert every potential opportunity into an hourly wage, it makes the trade-off clear. And of course money saved is tax-free.

So, how do you determine if something is worth doing yourself or if you should pay someone else to do it (which is really the heart of the question here)?

For me, I look at the job, consider the time it would take, the skill (or lack of it) that I have for the job, the frustration factor, and the total cost. Then I simply decide which I'd rather have -- the time or the money.

For example, we recently had someone paint our bathroom. Here's how we decided to have someone else do it versus doing it ourselves:

• The project was going to take a good bit of time since 20-year-old wallpaper needed to be removed, the walls fixed after that, fixtures removed (and then replaced), priming, and painting. In all, it took the painter several days and probably 30 hours to do the job. It might take me 40 hours to do it. That's a couple weekends with some nights thrown in. Yikes!

• It doesn't take a lot of skill to paint, but to do it right (and handle all the prep and other tasks associated with it) isn't a piece of cake (especially the wallpaper removal). Plus there's a HIGH frustration factor with the wallpaper. Did I really want to do this? Sure, if it was going to save me $3,000.

• The estimate was $500. It was from a friend, too, so we knew he would do a great job (he'd done stuff for other friends.) Seemed like a good price to us.

• So it was $500 for 40 hours and no frustration. Seemed like a no-brainer to us -- we had him do it.

We make all sorts of decisions this way all the time, some consciously and some unconsciously. But it really comes down to the same set question -- would I rather have the time or the money?

How about you? How do you look at the time/money trade-off?

The Cost of Commuting -- Balancing Time Versus Money

Here's a piece from Business Week that says in 15 top U.S. cities, the more you make, the more time you probably spend commuting to work. In other words, the high earners generally don't live in an urban area, they live in the suburbs and need to take a car, train or some other form of transportation to get into work each day. Here's a summary of the situation:

The study also suggests that there is a link between salaries and the time people spend in a car, bus, or train each morning. The poorest people in these urban metro areas have the shortest commutes. In the Boston metro area, for example, people earning less than $20,000 a year commute typically commute 17.3 minutes each way compared with people earning $50,000 to $60,000, who commute 30.8 minutes. Commute times in the city of Boston don't rise much for people earning more than $60,000. Similarly, in New York City commute times climb steadily as annual salaries rise before peaking for employees earning $110,000 a year. The commute time peak in Los Angeles is $60,000; it's $70,000 in Detroit; and it's $30,000 in the vast Dallas-Fort Worth-Arlington metro area, where the typical commute time for wealthy workers is just 26.4 minutes.

This obviously brings up an interesting time-for-money sort of discussion (not to mention the "quality of life by living outside the city" discussion, but we'll table that one for now. For illustration purposes, here are a couple personal stories -- one from a friend and one from me:

• A friend of mine used to live in New Jersey and had a job in New York City. He would commute two hours each way into work and then back home for five days a week. Yep, you read that right -- four hours a day commuting (or 20 hours a week.) He got up at 4 am so he could leave home at 5 am (to "minimize" traffic), getting to work at 7 am. He then left at 6:30 pm (again trying to limit the traffic he had to fight) and got home each night at 8:30 pm. In other words, he was gone each day from 5 am through 8:30 pm. His family life was almost non-existent. He slept much of the weekends because he was exhausted. His health was a mess. Sure, his family had a nice home and he made $150,000 a year, but he didn't really have a life. He moved to a smaller city a few years ago and had a 15-minute commute, a bigger house in the suburbs, still made close to the same amount, and his quality of life went way up (BTW, his finances probably improved dramatically because his living costs likely dropped big-time.)

• You all have seen the cities I've lived in, so you know that I've never had a huge commute. My worst was actually in Pittsburgh where I had a 30-minute one-way commute -- much worse when the weather was bad. Even in DC I took the metro and made it to work in under 20 minutes (of course I was a student then, and probably would not have lived where I did if I'd had a family.) My commute now is under 15 minutes in good weather but can be as much as 30 minutes if we get hammered with snow and ice the night before. In other words, it's a GREAT commute for the most part -- not much time at all.

We've talked about the fact that some people want to be paid more if they have a long commute, and I can see where they're coming from. If I had to switch to a longer commute (let's say 30 minutes each way), there would certainly need to be a compelling reason (like much more money, better job satisfaction, etc.) before I would move. My time is just too valuable to give up for a few thousand dollars more a year.

How about you? How do you balance the time/money issue?

Financial Time Perspective

The following is a guest post from Marotta Asset Management.

I was back at Stanford University recently and heard famed psychologist Philip Zimbardo lecture on his latest book, "The Time Paradox." His work suggests that understanding your own time perspective may help you unlock the secrets of financial freedom. In other words, how we think determines who we are and what we do.

Zimbardo's book focuses on how we perceive the effects of time on every aspect of our lives and our decision making. His Time Perspective Inventory scores individuals in six different time perspectives. Each perspective comes with strengths and weaknesses, and some are better at handling modern life and wealth management.

Within Zimbardo's categories are two past, two present, and two future perspectives. Both the past and future perspectives are abstractions. In a very real sense, we only experience the present. The past is an abstraction of gratitude and regrets. Similarly, the future is an abstraction of possible fears and longings.

Although present thinking may have been critical in simpler times of survival, it isn't necessarily the best perspective today when wealth itself is also the abstractions of shares in a company or zeros in a bank account.

People who live in the future are by far the most successful. Western civilization rose and prospered because of our future-oriented culture. Unlike present hedonists who live in their bodies, Zimbardo writes, "Futures live in their minds, envisioning other selves, scenarios, rewards, and successes."

He explains that you can test for future thinking as early as age four by giving children one marshmallow and telling them if they wait until you get back to eat the marshmallow, you will give them another one. Interestingly, children who have learned to delay gratification at age four score an average of 250 points higher on their Scholastic Aptitude Test (SAT) 14 years later. It isn't that time orientation is determined by age four. In fact, Zimbardo argues we are all born as present hedonists, seeking pleasure and sustenance while avoiding pain and bitter tastes. But by age four it is already apparent that some children live in an environment that encourages a future orientation.

Futures make money. They earn more. They get more education. They get better jobs. But most importantly, they save more and spend less. They discuss finances with their children and model future-oriented choices every day for the next generation.

Much of the advice in this column could be summarized as acting in a prudent future-oriented way in your investments.

Present hedonists use their money for fun and exciting experiences. They are the most likely to pile up credit card debt or experience home foreclosure. Their journey from rags to riches, if it happens, is often a round-trip ticket. They consider savings a token expense and a low priority. Impatience may cause them to chase returns.

To present fatalists, money just doesn't matter. They don't designate their money for present or for future enjoyment but simply spend it because it's there. Thus their spending and investments are random, and they are unlikely to reach their long-term goals.

Past-oriented people are rare in the United States. They generally do not take risks, and they invest conservatively. Past-positives focus on their achievement of earning and saving and do not want to risk losing money. Past-negatives remember only investment downturns and don't want to be burned again. Neither the past nor the present-time perspectives prove to be as successful as the future perspectives at managing their wealth.

We can view our present market turmoil through each of these time grids. Past-positives are thankful for longer term gains over the last few decades, whereas past-negatives only measure their losses from the recent high watermark. Present hedonists use market losses as an excuse to enjoy rather than invest; present fatalists don't believe what they do matters because global forces are completely out of their control. Only future goal-oriented investors recognize that the stock market has gone on sale, and today is an even better day to invest in a balanced portfolio.

Zimbardo also points out that "smarter people have higher annual incomes but are no wealthier than average people are." Given that every 10 IQ points correlates to $4,250 a year more in annual income, smart people should be richer. Alas, they are not. Smart people make more, but they also spend more, sometimes a lot more. Zimbardo concludes with this simple moral: "To become wealthy you cannot spend more money than you make, and you must invest wisely." Sage advice.

Some researchers suggest that the present orientation of the poor is pathological. But Zimbardo is more optimistic. He believes we can learn to be sufficiently motivated and to change our attitudes and the behaviors associated with them.

Zimbardo offers the following five simple steps toward achieving financial freedom and using time to work for you: (1) The present is the best time to start investing. (2) Time in the market is more important than timing the market. (3) Know when your time will be up; those with a long time ahead of them can afford more risky investments. (4) You can't time the markets. (5) A hedonistic time perspective is an expensive habit few can afford.

I asked Professor Zimbardo what he thought was the ideal time perspective for Americans today. He replied, "It is vital to develop an optimal blend of several time zones, so that you are able to flexibly shift mentally from one to the other depending on the situation. When there is work to get done, call up your future focus--but not excessively so (that can lead to sacrificing family, friends, fun and sleep). When you complete a task, take a time-out to reward yourself, indulge the present hedonist in you (get a massage, manicure, hot tub, see a movie, read a good book, meet a friend at a coffeehouse) but only moderately so. And always make time to engage with your positive past, your family, your own identity over time, with your legacy and cultural foundation. The past gives you roots; the present hedonism supplies the energy to take chances, to improvise, to take risks; the future gives you wings to soar to new destinations, to imagine new visions. You can have it all if you work at creating this balanced time perspective."

Perhaps a future study could find the correlation between your Zimbardo Time Perspective Inventory Score, your credit score and the size of your investment portfolio. To see how you score, visit www.thetimeparadox.com; take the test and score it.

Money Versus Time

Here's an interesting piece from Jean Chatzky where she discusses the trade-off between time and money -- in particular, the time we all spend looking for a bargain versus the amount that we actually save. Here's what made this issue hit home with her:

It's easy enough to measure how much money you can save by shopping around or by taking on an unpleasant chore, but most of us don't run the numbers on our time.

It began to dawn on me that I had spent the equivalent of a full workweek searching for a bargain that might save me a few hundred bucks. Crazy, no?

Assuming that she could have saved much of that with only a few hours of work, then it probably was crazy.

The piece also goes on to list other ways we all waste time, such as:

• The typical worker wastes two hours in an eight-hour day.
• The average American spends 150 hours a year looking for misplaced items and information.
• The average American spends 1.2 hours per day shopping.

How do they get these numbers? Especially the second one. Does someone actually track this?

Anyway, the article gives a simple rule-of-thumb for making the time/money trade-off:

Say you make $100,000 a year. Remove the last three zeros ($100), divide the number in half and you get your approximate hourly rate, in this case $50. Unless you're "making" that much by shopping for your TV or constantly combing the Internet for slightly higher CD yields (or whatever your time-suck happens to be), you're losing money.

This is where I want to throw it open for discussion. What do you think of this rule? My initial take is that it ends up with a number that's too high -- that I really don't need to make/save that much to make it worth getting a bargain -- but what do you think?

Is Clutter Costing You Time, Money, and Your Career?

Crown Financial Ministries has some thoughts on the high cost of clutter. Some highlights:

National studies have shown that the typical executive spends four and one-half hours a week looking for lost papers. At a salary of $30,000, the cost of searching for important papers, measured in lost time, is $3,376 per year. At $60,000, the cost is $6,752 per year. At $100,000, the annual cost jumps to $11,250.

As staggering as these costs are, the majority of managers and business owners with whom I've worked report that they lose even more. I have found that the cost often jumps to 15 percent of their yearly income.

Just think—at this rate, nearly two years of each life is lost looking through clutter.

Oh no, I think she's talking to me.

My desk is always a mess at work, though I don't spend a lot of time looking for lost papers (or at least I don't think I do.) I have a fairly firm grasp on what's under each pile. ;-)

That said, I'm sure I do lose some time because I have a messy desk. And lost time means lost productivity -- which can lead to a lower job performance, income, etc. In fact, Penelope Trunk thinks that simply having a messy desk alone can undermine your career.

What are your thoughts on the issue? Is a messy desk costing you? Or maybe it's at-home clutter?

Perhaps we all should make some extra money by selling our old stuff and de-cluttering our lives!

The Value of Time in Your Finances

I recently read a piece from Suze Orman about the value of time in your personal finances. The piece details how time can work for you or against you (it's your choice) and she gives examples dealing with mortgages, retirement and credit cards. Here summary of the article is as follows:

The crucial lesson of this quiz is that instant gratification isn't the key to financial success. Easy isn't necessarily right. Investing on the basis of what you hear the gang talking about at work or at a dinner party is easy. Investing on the basis of doing your own research so that you know what you're doing with your money is right.

It's equally foolhardy to assume that small amounts don't matter. We find it so easy to throw away "small" amounts of money on things we don't need, because we don't value a few dollars here or there. But I bet if you add up all the small ways you spend money you'll see that you're throwing away $50 a month (and probably a whole lot more). If you managed to save that $50 a month for 20 years, you'd have nearly $30,000 saved up.

Acting impulsively with money ends up being doubly costly. It often means you don't give your money the time it needs to work for you, and there's no more important investing rule than using the power of compounding -- putting money away and letting it grow over many years -- to help you reach your financial goals. The impulsive urge to go for the quick solution -- jumping at $1,000 a day, for instance, rather than the doubling penny -- undercuts you in the long term.

Financial success requires taking the time to weigh your options. And whether it's your IRA or your mortgage, it pays to make sure that time is always working for you, not against you.

Here's my summary of the issue: Either time can work for you or against you. It works for you when you save early and often, over the course of years and decades, and let the power of compounding and the power of time make you wealthy. It works against you when you prolong your debt payments, like when you take out an evil home loan or pay the minimum balance on your credit card. In these cases, the power of compounding works in favor of the bank/credit card company and put you in a worse-off financial situation as a result.

Being a Steward of Your Time

I've written before that time is more valuable than money. Why? Money can be replaced, but once time is gone, it's gone for good.

Just as Christians need to consider how to be good stewards of the money God has given them, we also need to be good stewards of the time God gives us. I found a piece where a reader at Eternal Perspectives asks how he could be a better steward of the time God has given him. Here's part of the answer that I wanted to share with you today:

When we keep track of how we spend our time it makes us better stewards because we become aware of what we otherwise don't really know. For example, people normally watch far more TV than they think. Becoming aware is the first step of stewardship, which puts us in a position to decide "I want to spend more time reading some great books and talking with my wife and reading to my kids, and to steward this time I can reduce my television watching by 10 hours each week." Again, we won't do this without a clear picture of how we're currently spending our time.

To me, this seems to be a good, practical outlook on the stewardship of time. I must admit that I haven't done it yet (kept a detailed record of how I've spent my time), though I think I will. I'm sure it will turn up some interesting bits of information.

Why I Pay More to go to a Car Dealer for Service Work

Yesterday in my post titled What My Second Credit Card Does for Me, I promised to tell you why I plan to go to my dealership to get my car serviced even though it costs more than other options. But before we do this, let's look at the facts:

• Servicing items: Oil change, grease, tire rotation
• Price at my "old" place: $14.95
• Price at dealership: $34.95

Ok, so my dealership is $20 more. And while $20 is not a fortune, there's no need to pay extra for something like this, is there?

Well, here's what my brand new dealership offers that the old place doesn't:

• Individual work cubicles with internet hook-up
• Free flavored coffee and treats (muffins, doughnuts)
• Clean, spacious, conveniently located rest rooms
• Lounge with big screen TV (in case I wanted to watch TV while pounding on my laptop and drinking my free coffee)

Now while all these add up to make for a pretty enjoyable "wait" at the dealership, it's the first one that really convinced me it was worth the money. Why? Because I can work/do something productive in comfort for the hour or so it takes to finish my car. The "old" place has a few chairs, an old TV (that you can't get away from if you want to think), no desk, no internet connection, etc. The dealership makes the hour I wait much, much more productive. And is my time worth more than $20 an hour? You bet!

As I've posted before, time is the most important asset in the world and it's easily worth more than money. So I'm willing to pay $20 more to get an hour's worth of productive time. Besides, it doesn't really cost me $20 more since my "cost" of that $20 is really only $11.20 because of the way I use my credit card rebates.

How about you? Is there anything you pay more for in order to save yourself time?

FMF recommends Emigrant Direct.

Young Workers are Passing Up Free Money, Jeopardizing Retirement

If you've read Free Money Finance for more than 30 seconds, you know how much I love the 401k. And I especially love it when an employer adds to it when an employees does. Who doesn't like free money??!!

Well, it turns out that many young workers don't like free money. Here are some stats from USA Today that tell how younger workers are passing up free money in their 401ks:

A new survey by Hewitt Associates found that only 31% of workers ages 18 to 25 who are eligible for a 401(k) participate in their company's plan. Companies typically require workers to save at least 6% to earn a full company match, so a lot of young workers are leaving money on the table.

So why is this happening? Well, there are some good reasons:

To be fair, young workers have a lot of competing demands on their paychecks. The average indebted college graduate has more than $17,000 in student loans, according to an analysis by the Center for Economic and Policy Research. Many are also paying off credit card debts and car loans.

But, in the end, it's the same old story -- they can't control their spending and spend less than they earn:

But 61% of young workers also cited "lifestyle purchases" as an impediment to saving. Those purchases include "the iPod, the big-screen TV — things that aren't required for day-to-day living but allow people to keep up with the Joneses," Lucas says.

This is really a missed opportunity for these young people. By not contributing today, they are giving up one of their best investment weapons: time. This minimizes the power of compounding on their investments -- significantly lowering their total return. That's why not getting the full 401k match is one of the 12 biggest money mistakes you can make.

If you are a younger worker or know one and he/she isn't contributing enough to get the full employer 401k match, please read the following links for futher information on this important topic:

• Getting Rich is Simpler than You Think
• Save Now, Retire Rich
• How Much Goes in the 401k?
• Why Many Aren't Securing Their Financial Future

The Dot-Com Billionaire: Mark Cuban on the Value of Time

We've talked before how time is more important than money and the point was reinforced to me today when I saw this quote from billionaire Mark Cuban on the value of time:

To me, money is...a way to buy the most valuable asset in the world: time.

Easy for him to say, huh? ;-)

Seriously, though, time is more valuable. You can always get more money, but once time goes by, it's gone forever.

Simplifying Your (Investing) Life

Here's a piece on how to simplify your investments from Christine Benz, Author of "Morningstar Guide to Mutual Funds: 5-Star Strategies for Success", and courtesy of ARA Content:

Bill Miller and most other top portfolio managers will tell you that there's a lot of day-to-day "noise" in the market, most of which has little to no bearing on the actual value of their holdings. Individual investors would do well to adopt a similar mind-set when building their own portfolios.

True, it's hard to open the business section without seeing an article about spiking oil prices or China's growth. But should you run out and buy an investment that's specifically designed to focus on one of those trends, such as a sector or regional fund? Probably not. Any such offerings tend to be expensive and exceptionally volatile, and individual investors have a record of buying them high and selling them low.

A better strategy, particularly if you're aiming to build a high-quality, low maintenance portfolio, is to focus on finding great core mutual funds -- broadly diversified offerings with reasonable costs, seasoned management teams, and solid long-term risk/reward profiles. If you've done that, you can pretty much tune out the day-to-day noise and let your fund manager decide whether the next big thing is worth investing in.

Taking the Best and Leaving the Rest

Simplifying your investment life isn't terribly complicated if you're managing a single retirement portfolio for yourself. But life is messy, with most investors juggling multiple portfolios and multiple goals at once. In addition to your own 401(k) retirement plan, for example, you might also be overseeing an IRA for yourself and your spouse, a child's college-savings plan, and your household's taxable assets.

If you're like many investors, you're running each of these various accounts as well-diversified portfolios unto themselves. That's not unreasonable. But to help counteract portfolio sprawl, consider managing all of your accounts that share the same time horizon as a single portfolio, a unified whole. In so doing, you'll be able cut down on the number of stock or bond holdings you have to monitor, and you'll also be able to ensure that each of your picks is truly best of breed.

For example, say your spouse's retirement plan lacks worthwhile bond holdings but has a few terrific core stock-fund choices; yours has several solid bond picks. If that's the case, you may want to stash all of your spouse's assets in the stock funds while allocating a large percentage of your own 401(k) plan to bond funds.

The key to making this strategy work is to use tools such as Morningstar.com's Portfolio Manager and Instant X-Ray, which let you look at all of your accounts together, as a single portfolio. That way, you can see if your overall portfolio's asset allocation is in line with your target, and you can also determine whether you're adequately diversified across investment styles and sectors.

Consolidating Your Investments with a Single Firm or Supermarket

By investing with only one fund supermarket or fund family, you eliminate excess complexity, cutting back on paperwork and filing. And the consolidated statements you'll receive can make tax time much easier, too. Instead of pulling together taxable distributions and gains from different statements, you'll have them all in one place.

If you want to stick with just one fund family, consider one of the big ones, such as Fidelity, Vanguard, or T. Rowe Price. These no-load families are all relatively low cost, with Vanguard being the cheapskate champion, and each offers a diverse lineup of mutual funds. If you would rather pick and choose among fund families, then a mutual fund supermarket might be your best option. Fund supermarkets bring together funds from a variety of fund groups.

Putting Your Investments on Autopilot

You may pay your electric and water bills automatically -- why not invest the same way? You won't have to send a check out every month, every quarter, or every year. There's an added benefit to investing relatively small amounts on a regular basis (also called dollar-cost averaging). You may actually invest more than you would if you plunked down a lump sum, and at more opportune times. When you're dollar-cost averaging, you're putting dollars to work no matter what's going on in the market. You have effectively put on blinders against short-term market swings: Whether the market is going up or going down, $100 (or whatever amount you choose to invest) is going into your fund every month no matter what. That's discipline. Would you be able to write a check for $100 if your fund had lost 15 percent the previous month? Maybe not. But that would mean $100 less working for you when your investments rebounded.

Be careful about using a dollar-cost averaging program if you use a broker or advisor to buy and sell shares, however. If you're paying a front-end sales load, you'll pay that amount on each and every investment. Perhaps more important, by making smaller fund purchases you might not be eligible for sales charge discounts that are frequently available to those who are investing larger sums.

Investor's Checklist: How to Simplify Your Investment Life

• Avoid faddish funds designed to capitalize on short-term market trends.
• Instead, stick with core stock and bond funds that you don't need to babysit.
• Consider all-in-one funds, particularly target-maturity funds, which grow more conservative as you get close to your goal.
• Index funds make great choices for investors who don't want to spend a lot of time managing their portfolios.
• If you have several portfolios geared toward the same time horizon, manage them as a unified whole, emphasizing the best options available to you in each account.
• Whenever you make an investment, write down why you bought it. If it no longer fits your reasons for buying, it's probably a good candidate for selling.
• Consolidate your investments with a single fund family or fund supermarket.
• Simplify your life by setting up an automatic investment plan. Dollar-cost averaging takes the emotion out of investing and should produce better returns over time than buying and selling erratically.

The time you have available to invest should certainly be part of your investment decision. See Do You Have Enough Time to Invest Like You Want To? and Part-Time Investing for additional thoughts on this topic. In addition, if you want more information on investing, here are some posts I recommend:

• Getting Rich is Simpler than You Think
• Fund Indexers, Take (Another) Bow
• Expenses, Taxes and Size Matter in Choosing Bond Funds (And Stocks too!)
• Where the Pros Stash Their Own Dough
• The Case for Indexing
• Investment Advice from Someone Who Manages Billions

Free Money Finance recommends Emigrant Direct.

How to Get Your Blog to 100,000 Visitors and Beyond, Step 14; Post Frequently

Step 14 to getting to 100,000 visitors and beyond: Post frequently.

This is probably the best tip I'll give in this series. If not, it's certainly close to the top. The simple fact is:

The more you post, the more traffic you'll get.

Yes, there are exceptions to the rule, but in most cases as soon as you increase posting frequency, traffic will go up. Mine did. Dramatically.

I covered many of the reasons and benefits in posting often in FMF Speaks: Why I Post So Often. Check out the post if you want more details.

The main issue of posting more often for most bloggers is that is takes more time -- time that they don't have (or can't find). I have several ideas on how to post more in the same amount of time, but that's for a later post -- if anyone's interested, that is.

Click here to read part 15 of this series.

Free Money Finance recommends Emigrant Direct.

Making the Most of Your Time

In my opinion, one of the things more important than money is time, mostly because money is renewable (if you lose it you can get it -- or even more -- back). Once time has passed, it is gone.

That's why I wanted to share this piece from Yahoo.  It offers ideas on how to make the most of your time. Here are the highlights of the piece:

Have a personal mission statement and allocate time accordingly.

Work to the sweet spot of time-effectiveness. For example, if, in writing a column, I could do a good job in a half day, a very good job in a day and an excellent job in two days, I'll probably aim for getting it done in a day. Why wouldn't I shoot for excellence? Because I could write a whole other very good column in that second day, and I believe two very good columns do more for the world than one excellent one.

Work at home. Most people who live in the suburbs waste an hour or two of their day's best hours merely getting to and from work.

Be kind in a time-efficient way.

Advice I'd give my child: Young people tend to think money is more important than time. It's not.

My thoughts:

1. I'm in agreement with the essence of this piece.

2. I have a personal mission statement and annual goals (resolutions) I want to accomplish. It helps me make sure my life is moving in the right direction.

3. Many of us would like to work at home, but can't. However, commuting time doesn't have to be a wasted time. I listed to audio books in the car and can listen to a book in a fraction of the time it would take to read it. I listen when driving to work, when I'm out on errands (as long as I'm alone), and on business trips. I also listen to books while exercising.

4. I have more money than time and as such I prefer to give rather than volunteer. This allows me to spend my most precious resource (time) with my top priority (my family) while also helping others. In addition, I'm helping those people who can't afford to give but have the time to volunteer by providing funds for their efforts.

5. Here are some more ideas on how to make the most of your time:

• Free Up More Time
• Simple Ways to Save Hours of Your Time
• What's Your Time Worth?

10 New Years Money Resolutions, Part 7

Here's part 7 of a series from Money magazine that lists their 10 New Years Money Resolutions:

Resolution 7: Free up more time

Making time for yourself and your family is the top goal for 2006, according to a MONEY poll. Lack of time is really two problems: You probably are too busy, and you aren't making the best use of the spare time you have. The action plan below will help you address both.

1. Outsource a task (or two or three).

2. Automate bill paying.

3. Take a vacation.

4. Relax, really.

My thoughts:

1. I've written a bit about the value of time. You can see these posts at the following links:

• Simple Ways to Save Hours of Your Time
• What's Your Time Worth?
• Comments: What's Your Time Worth?; An Opinion

2. We have four vacations built into our calendar every year: three visits to family around the U.S. and one visit from my parents. We've done this every year for several years, so it's a built-in time of "relaxation" (if you can call them that). ;-)

3. In addition, this year we want to take a special vacation with our kids. Since we live only a few hours from Chicago, we've thought about a vacation there to see all the museums, the aquarium, etc. My wife and I did that alone a few years ago and really enjoyed it. I think our kids would love it.

4. I also plan to ride in a few (2-3) centuries (100 miles on a bike) this year, so these will be mini-vacations for me.

Click here to read part 8 of this series.

Give Smart

Here's a unique perspective from Suze Orman on garage sales versus giving:

Financially speaking, I can't make any sense out of garage sales. You have to invest a lot of time to hold one, when you could simply take all your unwanted stuff down to the local charity (or even ask them to come cart it away for you) and claim the donation as a tax deduction. Do you really want to spend a weekend holding a garage sale-with no guarantee you will clear out everything you don't want-when you can spend an hour or two gathering up your stuff and making a donation whose tax value will likely exceed the value of your garage sale's proceeds?

She has a point. I do like garage sales but also realize that there's a value to your time and if you're not making much money for a big time commitment, that's not a good deal. (In fact, you could give away your items and "give away" the time you save as well).

Where's the balance? You'll need to do the math. What will you make in profit from the garage sale and what will it cost you in time versus what you make (in tax savings) by giving away the items and what time you'll save? The value of your time is subjective, so you won't get a clear answer, but this method should get you close.

Comments: What's Your Time Worth?; An Opinion

Here's a comment a reader who responded to my post on What's Your Time Worth?:

I've always been puzzled by articles that discuss the value of one's time. They all cite the same formula: if you make $20/hour at work, then it is worth it for you to hire someone else to do something for you if they can do it cheaper than your $20/hour cost.

But that really isn't right. Your $20/hour wage is based on 2080 work hours per year. But you're not paid for your free time, and there are 6680 of those in a year. So to truly represent your value per hour, you need to spread your earnings out over work AND personal time, not just work time.

Some might think that's not fair either - an hour spent mowing your lawn is an hour you aren't making money somewhere else. But how many people really use their personal time to earn more? For many of us who are salaried, we couldn't pick up additional hours (for pay) even if we wanted to.

In my mind, what it really comes down to is the value that you yourself place on your time. Hire a housekeeper if you want, but realize that the benefits you receive from it will likely be more psychic than financial.

Time continues to be a tough one to place a value on, but the second-to-the-last sentence here does a great job of getting close to my personal view.

Reminder: Free Money Finance is currently in Russia.

Simple Ways to Save Hours of Your Time, Part 4

Here's part 4 of an article on how to save hours and "add" time to your life. Today's tips are estimated to save you seven hours or more:

Computer time. Computers are like phones: When you use them it's easy to lose track of time. "Check e-mail twice a day and return messages all at once. You'll save an hour a day," suggests Breese.

TV viewing. "Establish one or two TV-free nights every week," says Judith Wright, author of There Must Be More Than This: Finding More Life, Love, and Meaning by Overcoming Your Soft Addictions. "Families can gain back eight hours a week this way since Americans, on average, watch four hours of TV a night."

If you have a service such as TiVO, program it to record your TV favorites without the commercials and watch it later. Many new home computers include digital entertainment options, with hardware that connects a TV cable to the computer and software that records your favorite shows directly to the hard drive. You could save as much as eight hours a week.

They are killing me!!! The computer and the TV are my biggest time offenders!! Most computer time is work or blog related (so I'll let this one pass). The only things I watch regularly on TV are football and AFV (with the family), but this probably adds up to several hours a week. If I only had ESPN, then all I'd need to do is watch the highlights. ;-)

Simple Ways to Save Hours of Your Time, Part 3

Here's part 3 of an article on how to save hours and "add" time to your life. Today's tips are estimated to save you at least three hours:

Errands. Map out your errands before you go. "You'll save time if you make a circular route of your stops, or try to group your purchases in one retail center," says Gold. You can also save time coordinating errands with your partner. "You'll shave off two hours a week if you tackle your list together," says Gold.

Cut down on driving time altogether by using Web services. You can get photos printed through services such as shutterfly.com. Many pharmacy photo centers also offer a Web-based option. Instead of standing in line at the video store, look into services such as netflix.com and have the latest DVDs delivered to your mailbox. This can save you another hour a week, says Christine D'Amico, author of The Pregnant Woman's Companion.

Phone calls. If you tend to lose track of time on the phone, keep a small hourglass or egg timer nearby, and use it on those busy days when 40-minute chats are out of the question.

Vickie Hansen, creator of the Web site www.myorganizedlife.com, and a member of the National Association of Professional Organizers, recommends screening your calls with caller ID and your answering machine. "If you're on the go, take your call list and do it when you're waiting to pick up your kids from practice. You can save 30 minutes a day," she says.

My thoughts:

1. My wife is good about mapping out her errands and so am I. Not much opportunity for us here.

2. I love the egg timer idea. I'm getting one for my wife. I just hope she doesn't time me with it while I'm watching TV. ;-)

3. I use the answering machine all the time to screen calls. Somehow, my wife can't resist picking up the phone. And it always happens to be someone who wants to talk for two hours every time we're headed out the door!

Click here to read part 4 of this series.

Simple Ways to Save Hours of Your Time, Part 2

Here's part 2 of an article on how to save hours and "add" time to your life. Today's tips are estimated to save you at least two hours:

Cooking. Most of the time you devote to making meals is actually spent juggling all the interruptions. Cut back your prep time by waiting until the kids have gone to bed. "Prepare pancake batter the night before," says Carrico. It only takes about five minutes to make, put in the fridge, and set out the syrup, skillet, and spatula you'll need. Small tricks like this can shave up to 20 minutes the next morning.

"To save wasted steps, look at how you have your kitchen arranged," says Lamendola. "Simply storing your cooking utensils close to the stove will save you significant time over the course of a year." To shave more minutes, prepare meals such as chili and stews ahead of time and freeze them, he adds.

Cleaning and organizing. Clean your house one room at a time. Create a portable cleaning caddy with cleansers, paper towels, and sponges, and start in one corner. Work your way around the room one wall at a time. You'll stay focused and avoid running back and forth to the kitchen. "This approach saves typically 50 percent of cleaning time," says Lamendola.

To get your kids to help keep the house neat, Stack suggests a system she calls Jail n' Bail. "If they don't put their stuff away, it goes in the jail box, and they have to pay five cents to bail it out. It shows them time is money—and easily saves me 30 minutes a day," she says.

My thoughts:

1. My wife's biggest "time waster" while making a meal is the phone. I usually cover the kids (take them to the basement to play) while she cooks, so we're not a distraction, but then she gets on the phone and the whole process gets bogged down. (She says it doesn't slow her down, but I know differently.)

2. I LOVE the jail idea!! It not only saves time, but it's another source of revenue. ;-)

Click here to read part 3 of this series.

Simple Ways to Save Hours of Your Time, Part 1

I've posted in the past on What's Your Time Worth and it's a topic I want to cover more in the future. Money and time are closely related, though money is renewable while time is not. To me, this makes time more valuable.

Here's an article on how to save hours and "add" time to your life. I'll be posting on it over several days as the tips are broken up by how many hours they will save. Today's tips are estimated to save you at least one hour:

Grocery shopping. Many grocery stores are open 24 hours a day, so take advantage of that. Avoid shopping during the peak hours of 11 a.m. to 1 p.m. or 5 p.m. to 7 p.m. weekdays, and you'll cut your regular shopping time in half. That saves you about 45 minutes per trip.

Stockpile groceries in advance when deals are hot. And if you keep a supply of such products as paper goods, soaps, cereals, crackers, and canned soups, you'll save time by not running back to the store for that one necessary item you always forget to buy.

"Put your groceries through the checkout in categories and ask the courtesy clerk to bag them that way," says Teri Gault, who offers other resources to save shopping time. "Once you get home, you can put it away quickly because it's already sorted."

Laundry. Saving all your laundry for large loads on the weekend takes away an entire day that you could be enjoying with your family. "Do it daily, instead of wasting a Saturday," says Laura Stack, author of Leave the Office Earlier. "You'll have just one load, which only takes 30 minutes between washing, drying, and folding."

Bills. If you prefer paying your bills by check rather than online, keep a portable bill-paying file handy. Pull it out when you're waiting for an appointment at the doctor, dentist, or beauty shop, and "maximize those minutes," says Molly Gold, whose company, GoMom, Inc., creates mom-friendly products. "Keep a file stocked with stamps, envelopes, a calculator, your checkbook, and bills. I do 10 minutes of banking a day, five days a week," says Kristine Breese, author of Cereal for Dinner: Strategies, Shortcuts & Sanity for Moms Battling Illness.

Getting out the door. If you routinely misplace your keys, hang a set on a peg near the door or attach them to a "clapper" key chain to minimize search time. Depending on how many times you use your keys, this can save you an hour per week.

"Have kids help make their lunches and pick out their school clothes before going to bed the night before," suggests Lolita Carrico, founder of the Web site modernmom.com.

Time-management expert Mark Lamendola recommends putting everything you grab in the morning in one place before you go to bed at night. "Lunch bags, briefcase, purse, and anything else you'll need. You can save 20 minutes by investing five the night before," he says.

My thoughts:

1. We could benefit greatly by being a bit more organized when it comes to grocery shopping. Seems like we make 3-4 trips per week to the store.

2. We have the laundry and bill paying ideas down to a science. Not much opportunity in our household to improve here.

3. Getting out the door is our BIGGEST time waster. Anyone have any ideas on how to get kids to stay focused and hurry up???

4. I put all my stuff for work on the counter by the door every night. It makes it very easy to grab everything I need and be off the next morning.

Click here to read part 2 of this series.

What's Your Time Worth?

Here's a thought-provoking piece from Yahoo on the value of time. Unlike money, time is not renewable -- once it's gone, it's gone -- and in this fact makes it much more valuable than money. But how do you place a dollar figure on it? Here are the questions Yahoo poses:

What's your time worth? From an economic perspective, is it better to mow your own lawn or pay a service? Iron your own shirts or send them out? Cook or buy take out?

Here are a few examples of decisions we make where time and money are factors:

While you might not drive 30 minutes across town to get $5 off a $200 DVD player, you might make the trip to get $5 off a $15 DVD, because you think one-third off is a terrific bargain. But in absolute terms, $5 is still just $5.

You spend an hour contesting a $3 mistake on your cell phone bill.

You start a new job and drag your feet for two years before joining the 401(k) plan. In that case, you believe your time is literally worth hundreds -- even thousands -- of dollars an hour, because that's what you lost by procrastinating.

So this leads us to the big question -- what is your time worth? Here's Yahoo's take:

The most obvious way is to simply compare your hourly wage to the cost of the service. Thus if you earn $75,000 a year, your time is worth $39 an hour. If your yard service costs about $40 an hour, you've got a pretty sound economic reason to pull out the checkbook instead of that leaf blower.

But that's not the whole story. Unfortunately, a sizeable chunk of your hourly wage goes to Uncle Sam. In addition, your buck goes a good deal further in, say, Hope, Arkansas, than Manhattan. A few years ago, economist Ian Walker of England's Warwick University created a method to calculate the value of one's time based on wages -- adjusted for taxes and the cost of living. To apply his formula to your situation:

• Subtract your federal tax bracket from 100.
• Multiply your hourly wage by that figure.
• Divide the result by the average cost of living rating for your community available from this site produced by the American Chamber of Commerce Researchers Association, or ACCRA, a nonprofit group that compiles cost of living data.
• Then take that result and divide by 100.

What? I need an example of that:

Here's an example: You're a single person living in Las Vegas, Nevada, earning $75,000 a year (or $39 an hour). Your federal tax bracket is 25 percent. The cost of living index for Las Vegas is 1.139. Given these particulars, your real hourly wage using Walker's formula is $25.68.

Now hiring that guy to mow your lawn (or, in the case of Las Vegas, water your cactus) doesn't look as appealing.

The piece ends with the following conclusion:

Of course, few of us can afford to outsource every chore we despise. So prioritize, starting with the tasks that devour the most psychic energy and create the most strife in your relationships. See if you can make a few tradeoffs -- in exchange for hiring the lawn guy, eat out less frequently, get your books from the library rather than the bookstore, and trim your utility bills whenever possible. Then hire the lawn guy or the cleaning lady.

I like the question they're attempting to answer and I give them bonus points for being specific and taking a position on the issue (something many personal finance articles refuse to do), but I'm not sure I agree with their rationale. For instance, it's not like I'll make an extra hour's wage if I don't mow the lawn. What's actually happened is that I've lost/spent money for the privilege of doing something else. This may or may not be a useful tradeoff. I think everyone needs to make a judgment for themselves on what their (free) time is worth and take action accordingly.

For us, we do most of the house and yard work ourselves. Not only do we feel it's a good use of our funds and time, but some of it is enjoyable (working together to rake leaves), educational (teaching the kids the responsibility of chores), and healthy (mowing the lawn with our non-self-propelled mower is a great workout). For other things, those requiring special expertise like car work, plumbing, or electrical work, we hire out. We could learn how to do many of these things, but doing so would take a lot of time and potentially be disastrous (if we did it wrong). In these cases, we think it's best to hire out.

What about you? How do you place a value on your time?