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Time or money?

Written by Richard Barrington - 3 Comments

It’s a common dilemma: When you are young, say just getting out of college, you tend to have plenty of free time but little money. Later, as your career takes off, you start to have more money but less time.

It would be nice to have both time and money at the same stage of your life. But if you had to choose, which would you pick? This post will look at a few ways that time-or-money choice is a fundamental characteristic of the job market.

Compensation stagnation

First, let’s start by acknowledging that, for many Americans, the choice of more money has been taken off the table. Adjusted for inflation, the total value of the compensation received by Americans grew by just 11.3 percent in the 20 years from 1992 to 2012, or less than 1 percent a year.

This inching forward in compensation is not the vision people typically have of getting ahead in the workplace, especially since America has an aging workforce, with the bulk of Baby Boomers in their late-career, peak earning years. One would have thought those peak earning years would have seen a stronger rise in compensation.

Time deflation

If compensation growth has been sluggish, is it possible Americans have at least been rewarded with more time? Think about what a difference the Internet has made over the past 20 years. Perhaps its greatest attribute has been the way it has allowed people to use their time more efficiently. Here are some examples:

  1. Online shopping. A great deal gets written about online shopping around the holidays, and rightfully so; but the broader truth is that online shopping has become routine for people throughout the year. This doesn’t just save you the time driving to and from the mall. Think about all the time you save finding the right product with a couple quick searches, rather than schlepping from store to store.
  2. Telecommuting. The Internet has given more people the option to accomplish at least some of their work from home. This saves commuting time — and rush hours are usually the least efficient times to be traveling — plus the extra time people who work from home don’t have to spend making themselves look presentable every day.
  3. Home entertainment options. Twenty years ago, if you wanted to see a reasonably current movie, it meant a trip to the movie theater, or at least a trip to Blockbuster for a DVD (or was it still videotapes back then?) Now, between on-demand channels and streaming video services, premium content is available without leaving home. Not only that, but large, flat-screen TVs have made the home viewing experience much more impressive than it was on the CRT-based TVs of the early 1990s.

Think of all this time-saving as a form of deflation. With monetary deflation, you can do more with the same amount of money because prices go down. In this case, it’s time deflation. You might not have more free time, but you can do more with it because the time it takes to do certain things has been slashed thanks to technology.

Paid leave becomes more common

Another way that many Americans have gained in time rather than money over the past 20 years is through increased access to paid leave from work. The percentage of Americans who get paid sick leave has increased from 58 to 75 percent; access to paid personal leave has increased from 16 to 44 percent; access to paid family leave has increased from two to 13 percent.

For some, paid leave has become even more useful because it has become more flexible. Employers in some industries are starting to offer consolidated leave, which can be used for any purpose.

Career and retirement choices

Naturally, careers often make people choose between time or money — do I pick the high-pressure career with great financial rewards, or do I settle for less money in exchange for a more laid-back occupation? In a different way, people face a time-or-money choice in retirement. Much has been written about Americans being forced to work longer because of low savings, but supplementing your income is not the best reason for working longer because you can’t always count on being able to do so. On the other hand, simply having an occupation — something to fill your time productively — can be an important reason to keep working past normal retirement age. Once a person reaches retirement, it often seems that free time becomes too much of a good thing.

The choice between time and money is a recurring theme throughout our careers and even into retirement. Over the past 20 years, the option of more money has become scarce, but in many cases free time has become more widely available. Even if picking time over money would not have been your first choice, enjoy it while you have it.

Published on March 31st, 2014
Modified on April 4th, 2014 - 3 Comments
Filed under: Working

About the author: Richard Barrington is a personal finance expert for MoneyRates.com. He has earned the CFA designation and is a 20-year veteran of the financial industry.

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3 Responses to “Time or money?”

  1. 1
    freebird Says:

    When I was in college I had the time and lots of outside interests, but couldn’t afford to go anywhere. While I was working I had the money but didn’t have time to do anything interesting. Now that I’m retired, I have plenty of time and money, but I’ve lost interest.

  2. 2
    mmm Says:

    Both my hubs and I are retired, not fully out of the loop, we volunteer for the poor which in our opinion is growing faster than any of the still working persons incomes, many work make little feed the wives or husbands and children and they starve are forced to go from one food pantry to another, no family to help them out cause they are on the same track..It is shameful in the greatest country on this earth that many are hungry even with JOBS…my hubs worked retail grocery and he was forced to retire he had a union job one of the few but the treatment in his experience was cruel and punishing, he feels great now and never goes into stores much at all, I eeked out my govt. job and many on the side and saved like hell, we only had one child and she was a smarty pants and studied in college and saved and saw what her dad went thru, she is doing fine, never married and is great with that choice as so many of her age boomerang back to parents who can not retire whatsoever they are supporting elderly parents and their grown kids..You are right about time and money – one might have the time if you don’t have any money it is not a happy situation, of course we never bought into havening material items and the only worry is getting a crap illness that robs of everything we find enjoyable, walking, hiking, biking and going to the beach with friends to enjoy times in a teeny tiny cabin and reminisce about our carefree youth as getting older is not for cowards in America..When has the time usually no money, when retired even with a tiny amount of money most have lost the interest no truer words were spoken..We keep it damn simple we want for nothing, enjoy our marriage of soon to be 40 years, love our only child and spend time with her and those we have known all our lives, mostly we are grateful!!!!!!!!!!!!!!

  3. 3
    BG Says:

    TL/DR: Time :)

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