If you’re like most people, you haven’t distilled your free time down into a dollar figure. But it's important when looking at making more money or finding a proper work-life balance.
What’s the point of figuring out the value of your free time?
You might want to maximize your income. Maybe you’re looking to set better financial goals for yourself or spend more time at home with your family.
Whatever it is, understanding how much your free time is worth can help you make more informed decisions about how you spend your time inside and outside of an office.
Doing the Math
The first step to figuring out how much your free time is worth is to determine how much time you have available each week.
Of course, this will vary depending on your work schedule, family obligations like after-school activities for your kids, and other responsibilities. However, most people can estimate the average number of hours they have available for leisure activities per week.
For instance, if you get home from work at 6 PM and go to bed at 10 PM, you have roughly 4 hours daily for leisure activities. Don’t forget to add the weekend to your calculation and subtract out required tasks like grocery shopping and helping your kids with their homework.
Next, consider the activities you do during your free time. Include fun activities as well as chores.
Do you like to spend your free time socializing with friends, traveling, or pursuing hobbies? Or do you prefer to spend your free time relaxing at home, watching TV, or reading?
Whatever your preferred activities, it's important to consider how much time you spend on each one and what you enjoy most. Be honest and non-judgmental with yourself during this process.
Monetizing Your Free Time
Once you have a good idea of how much time you have available each week and what you like to do with that time, the next step is to think about monetizing your free time. Even if making more money isn’t your goal, this can still be a fun part of the process.
Monetizing your free time with a side job can be done in various ways, depending on your interests and skills.
For example, if you're a skilled photographer, you may consider selling your photos online or starting your own wedding photography business, although wedding photography can be quite stressful and time-consuming.
You could start a landscaping or gardening business if you're a seasoned gardener. Or, if you're a talented writer, you might consider freelance writing or starting your own blog.
If you like the thrill of investing, another option for monetizing your free time is to invest in stocks, bonds, or other assets that can generate a return. This can be a great way to build wealth over time, but it's important to do your research and understand the risks involved.
For instance, the S&P 500 Index was down nearly 20% in 2022, losing many investors' money. However, the S&P 500 gained almost 27% just a year prior to that. When investing, it’s important to remember that long-term investments tend to perform better than short-term trading.
Beyond monetizing your free time, you'll also want to consider the opportunity cost of your leisure activities, which can be confusing for many people.
What Is The Cost of Your Leisure Activities
For example, if you're spending an hour a day browsing social media or playing video games, that's an hour that you could have spent on a side hustle or investing in cash-generating assets.
It is important to understand that each of your leisure activities has an opportunity cost. The better you understand those costs, the better your decisions will be about how you spend your free time.
Don’t forget about setting better financial goals. The best goals are those that align closely with your values and family priorities.
For example, investing in the stock market or real estate might be at the top of your list if you're looking to make your family richer. Or, if you want to travel more, you might focus on earning more money in your free time so that you can afford to take more trips.
Finally, it's critical to remember that the value of your free time is not just about money. It's also about enjoying more time with your family and making the most of your time away from work. Whether you're traveling, pursuing hobbies, or spending time with loved ones, remember that your free time is an opportunity to relax, recharge, and enjoy life.
How Much Is Your Free Time Worth?
To sum up, calculating the value of your free time is important for establishing a proper work-life balance and enjoying more of your leisure activities. The value of your free time will depend heavily on your goals and priorities. The better you understand those goals, the better decisions you'll make about what you do outside the office.
This article was produced and syndicated by Wealth of Geeks.
Steve Adcock is an early retiree who writes about mental toughness, financial independence and how to get the most out of your life and career. As a regular contributor to The Ladders, CBS MarketWatch and CNBC, Adcock maintains a rare and exclusive voice as a career expert, consistently offering actionable counseling to thousands of readers who want to level-up their lives, careers, and freedom. Adcock's main areas of coverage include money, personal finance, lifestyle, and digital nomad advice. Steve lives in a 100% off-grid solar home in the middle of the Arizona desert and writes on his own website at SteveAdcock.us.