I typically listen to a podcast when I walk and today I happened to catch-up on Tim Ferris's feed. This particular episode, What I Learned in 2016, has Tim recounting some of the lessons learned from the last year. Of the things that he said, this question kept echoing in my mind:
When considering a purchase, think about how this item will affect how you use your time?
He flips purchasing decisions from dollar values to time values. I don't think many of us think this way. We purchase out of impulse, out of boredom, to show off, to make ourselves feel better, but we never think about the time aspect of that purchase. I see this both ways: the time spent working to earn enough money to buy that item and the hours spent taking care of such item post purchase. It doesn't matter if it's a $5 dollar shirt or a $50k sports car.
If you make $10 an hour, buying 4 $5 dollar shirts means you have to work 2 hours. While those shirts may seem cheap, the true cost is the 2 hours you had to put in to get back 4 shirts. Now, you may really need 4 shirts, but chances are you are not starting from scratch. Conversely, once you purchase those 4 shirts, you now have to spend time taking care of it, you have to spend time deciding which shirt to wear, you may spend time looking for one of the shirts, the time spent just managing this shirt adds up. Instead of the shirts costing you 2 hours, it's now costing you 4 hours or more. That's time that could be spent doing other things instead of taking care of a shirt. Of course, this is a minor example. Think of this on a grander scale, a car, a house, a vacation. Of these larger items, which one will cost your more time before and after the purchase? Whose time are you willing to sacrifice to make that purchase: yours, your children's, your aging parents?
The new opportunity cost is really about time. In the end, any purchase that you make uses time as the primary currency and it's the only currency that actually is finite for each of us. You can always make more money, but you cannot gain more time. It seems to make sense that we need to start making decisions of dollars into decisions of time. Spending money regardless of what it is affects how we use our time.