Time Stylers Tool Kit: Opportunity Costs
When it comes to optimising how and where you spend your time, knowing what your time spend is costing you is key. Last post I explored Financial Costs – thinking about your time in dollar terms is a great way to stress test whether the task you are working on right now is genuinely the best use of your time.
There are 3 other cost layers to keep in mind, and unfortunately these costs are not mutually exclusive – for any given use of your time there can be multiple costs involved. I think of these cost layers as layers of a cake – while the top layer of costs are your financial costs, you need to keep cutting through that cake – the second layer of costs are your Opportunity Costs.
Opportunity Cost – the trade-offs
While we all have the same 24 hours a day, how you allocate, manage and then use your time in each of those hours will be very different. Opportunity Cost is associated with anything of value (financial or otherwise, such as a lost benefit or lost pleasure) that you have to give up to acquire or achieve something else. Put simply – what you choose to trade-off.
So, for example:
- if you choose to spend an hour of your time on Facebook each morning rather than going for a run, then in addition to what this costs you financially at your hourly rate, your Opportunity Cost is your workout;
- if you choose to spend 4 hours on a Sunday cleaning your home, then in addition to the financial cost, your Opportunity Cost is the 4 hours you could have spent having fun with your kids; a long lunch with your friends; or catching up with your family;
- if you choose to spend 10 hours a week working ‘in’ rather than ‘on’ your business, then in addition to whether this makes financial sense, your Opportunity Costs will include a myriad of strategic, partnership and client opportunities lost.
When it comes to choosing where to spend your time ask yourself this: ‘What is the trade-off?’
If the trade-off isn’t worth it and the Opportunity Cost is too great, make a better choice.
Next week: Emotional Costs
Time Stylers founder Kate Christie is a time management specialist, speaker and the author of best selling book, “Me Time – The Professional Woman’s Guide to Finding 30 Guilt-Free Hours a Month”, which walks readers through a proven 5 step process to find and harness lost time. Connect with Kate to have her speak at your next event or to help you and your team improve your productivity.