“Time is Money” Doesn't Mean What You Think It Means

When smart people say something profound, it’s worth spending more time to fully understand it

And why that’s important in business and in your personal life…

“You keep using that word. I do not think it means what you think it means.” — Mandy Patinkin’s Inigo Montoya in the 1987 romantic comedy The Princess Bride

The well-known phrase “time is money” is often attributed to Ben Franklin, who wrote the following in a short essay “Advice to a Young Tradesman” (though the origin of the concept traces back to ancient Greek philosophers):

“…Remember that time is money. He that can earn ten shillings a day by his labour, and goes abroad, or sits idle one half of that day, tho’ he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent or rather thrown away five shillings besides…” — Ben Franklin

As most of us understand and use the phrase, it admonishes us to not waste time, since wasted time equals wasted money.

If time truly was money, then just like most of us being able to make money doing or selling something, we’d also be able to “make time” in a similar sense (not in the sense of freeing up, rather than truly “making” time to do something).

However, while we have no idea when we will draw our last breath, we all do know that one day we will die, and that once spent, time can never be recovered or made up.

Unlike money, once spent, time can never be recovered or made up

This is especially important for entrepreneurs, and most especially ones who still wear all hats in their business. A minute spent doing one thing is a minute that cannot be spent doing anything else. If you think multitasking means you can do more than one thing at a time, see this:

This is why entrepreneurs are often taught by their mentors to hire others (as employees or contractors) to do for them the stuff that doesn’t require their specialized expertise. These mentors teach their “mentees” to jealously guard their time for “their best work.”

This is why, even though I could do a decent job preparing my tax returns with the help of TurboTax, I hire an accountant instead. To make sure I pay as little tax as I’m legally allowed, but no less than that (and get into trouble with the IRS), I’d need to spend a lot of time learning about taxes and TurboTax. Those hours would not be available for doing my best work. As a result, though I’d save a couple thousand dollars in CPA fees, I’d lose many more thousands of dollars in client work I wouldn’t be able to do in those hours.

It’s also why I hire a contractor to do my yard work. This contractor is expert in taking care of lawns, weeding, etc. and has spent a lot of money on a riding mower and other tools that wouldn’t make sense for me to buy for my single yard. As a result, his crew can finish my yard work in a couple of man-hours where doing the same would take me half a day. Also, their hourly rate is much lower than what my clients pay me to do what I am expert in.

Every once in a while, someone is featured on some variety or news show who does “extreme couponing.” On its face, getting hundreds of dollars of groceries for pennies on the dollar sounds impressive, and perhaps arouses a bit of jealousy next time you check out at your grocery store and have to pay $150 for your cart-full of stuff.

However, if you think about it globally, you might not be missing anywhere near as much as you think.

First, if you need to buy more than you’re likely to use anytime soon in order to make the most of your couponing craze, you will at the very least need to have extra storage space in your home which may require paying higher rent or mortgage payments, paying for additional closet space, etc. Worse, you may end up throwing away stuff that expired or that you decide you don’t want to consume anymore.

Second, to really coupon to such extremes takes time, and as we discussed above, time is (in a limited sense) money. To see if this makes sense for you, consider your “time opportunity cost.” What else could you do with the time you’d need to spend scouring for coupons and deals and running to the store? How much money could you make in that time if you worked a side business instead?

In a recent piece, Ben Le Fort argues that “no matter what you are cooking it will be significantly less expensive than ordering a meal kit or going to a restaurant.” This is absolutely true, as far as it goes. However, I’d push back and say that comparing the cost of groceries needed to cook a meal at home to the cost of eating out or the cost of buying a prepared meal misses an important aspect — time.

If you consider the value of your time spent driving to the grocery store, looking for the items you need to prepare a meal, standing in the checkout line, driving back home, preparing the meal, and cleaning up afterward, you may be far better off financially if you eat out, or at least order in.

If you consider the value of your time spent driving to the grocery store, looking for the items you need to prepare a meal, standing in the checkout line, driving back home, preparing the meal, and cleaning up afterward, you may be far better off financially if you eat out, or at least order in.

As a caveat to this, home-cooked meals are usually much healthier than restaurant meals which have far more fat, sugar, and salt in them. If you decide to cook your meals for health reasons, I’m all for it. Just don’t think that saving $32 on beef Wellington (per Le Fort) makes financial sense unless your time is worth less than $16/hour (assuming it takes you a couple of hours to shop, prep, and clean up after the meal).

If your time is worth say $50, you’d be paying $68 more in time opportunity cost on your home-cooked meal than if you’d order it at a restaurant.

“Time is money” doesn’t necessarily mean that you should work as much as possible to avoid leaving money on the table, as Ben Franklin’s essay seems to argue. It also isn’t intended to assert an absolute equivalence between time and money.

The best way to understand it is that time is a limited resource even more than money. Thus, when deciding how to spend your time or your money, consider both as different sides of the same metaphorical coin. Think about the value of your time in creating the money you’re planning to spend, and about the value of the time you’d be saving by spending that money. When you think about both aspects at the same time, you will likely make better financial and time-management decisions for your individual circumstances.

When deciding how to spend your time or money, consider both as different sides of the same metaphorical coin. When you think about both aspects at the same time, you will likely make better financial and time-management decisions for your individual circumstances.

This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.

Opher Ganel has set up several successful small businesses, including a consulting practice supporting NASA and government contractors. His most recent venture is a financial strategy service for independent professionals. You can connect with him there, or by following his Medium publication, Financial Strategy.