Why Time is NOT Money
Everyone saying time is money is missing a crucial distinction. Money is a commodity. Time is not.
Saving money can actually cost you more in the long run and here’s why. Money can always be acquired later or used in whichever fashion you’d like whereas with time, you can’t make it up once you’ve lost it. Therefore, the way you treat money should be different than the way you treat time, but there’s definitely a relationship between the two, one that you might not expect.
Time has three dimensions: emotional, social, and functional. Money has two dimensions: present and future value. When you decide to save your money and stop yourself from buying what you want, you’re taking the present value of your money to say no to the emotional value of time.
For example, say you’re 25 and want to spend money on a car. You really want a BMW but you don’t get one because it’s generally bad to make a large car payment in your 20s if it puts you in debt. Saying no to a BMW now does indeed save you a lot of crucial money in the long run but is buying a fast car when you’re old and retired the same as buying one when you’re young? I’m not saying the right decision is to go in debt when you’re 25 but this illustrates the issue I want to highlight. The social and emotional value of time can in many cases run inverse to the value of money. Money that’s saved up has potential to increase exponentially toward the future (through investments) but the emotional value of spending it can exponentially decrease at the same rate.
There are many things that hold much more value to us in the present than they would in the future.
Why do we spend things? Half the time it’s for something we need and the other half of the time it’s for something we want. I can’t speak to the needs aspect because that’s indisputable. However, we spend on our wants because we want to be happy. We spend money because we want to be happy. Some of our wants are stupid and based on brief hormonal impulses, but there are other wants that linger and weigh on our minds for years. Everyone has wants that are unique to them which they hold onto for whatever reason. Some people grow up wishing they could play guitar and dream of the day they could pick one up and afford lessons. For others, it might be skateboarding or getting a dog. These purchases are not necessary to surviving but the effect they have on our happiness, I’d argue, varies depending upon how long we wait to acquire them. There’s no disputing that buying a puppy when you’re 60 is still joyful but imagine being young and energetic enough to match the puppy’s energy and innocent outlook on life when you’re 20. Or being able to start a punk rock band with your college roommates when you’re 18 vs being 30 with a full time job.
I think you’re seeing the picture and I hope you understand the real message I’m trying to convey. There’s a gentle balance between being reckless and being fearless. Too many people get scared that spending their money on things they truly desire will hurt them financially in the long run. Ultimately, this causes them to be unhappy even when they make the purchase. Screw that. The money will come. With all large investments, make them sparingly and sound but once you make them, allow yourself to enjoy it.
At the end of the day, investing in your own happiness will always pay off.
Your future self will eventually look back on all your experiences with no regrets but until then, click Buy and don’t look back.