What do you earn for? I had this discussion with a friend recently when we were discussing where exactly does our money go.

We realised that our earnings are basically for two things, our survival and our happiness. Everything that we do with our money is based around these two things. In my friend’s case happiness was a simple gift for his girlfriend. For both of us rent was a survival expense.

It is generally easy to figure out which things are essential to spend on – mostly you don’t have an option. When it comes to happiness related spends, however, things become more confusing.

There are too many competing expenses. The list seems to get longer each year, Movies, eating out, pubbing, friends and family, our hobbies, and so on.

Is it worth your time?

What if you had to pay for something with your time rather than money? Curious?

In a way that’s what we already do. Let’s take Raj as an example. He is a 27 year old individual who makes about Rs. 50,000 each month as take home salary. He spends Rs. 20,000 on essentials such as rent, utility & phone bills, and food.

He has Rs. 30,000 left for other things. Now this means that each day in a month is worth Rs. 1000. If Raj decides to buy a smartphone worth 50,000, Raj will effectively be paying for the phone with 50 days of his life.

Earnings Per day = Disposable Salary Per month/30

Disposable Salary Per month = Take home Salary per month – Essential Expenses per month

We can use this to decide the worth of different things which compete for our money. We’ve been having fun with this approach and also begun to look at our purchase decisions in a new light.

  • A performance bike worth Rs. 1.5 Lakh means a 150 days of my life
  • A 5-star dinner for Raj and his girlfriend means 4-7 days of his life.(Totally worth it!)

We all assign different values to different experiences and purchases, and thus what may be worthwhile for me may not be for you. This approach is, therefore, a realistic way to decide what we spend our money on.

If it’s worth your time, then it is worth your money.

What do you think?120