one little cog

I’ve been thinking about how we spend our money. Especially after listening to the complaints from many friends about the lack of money they have to buy the things they want. My dad also pointed out long ago when I got my first pay cheque from delivering flyers door-to-door in the neighbourhood, that as soon as you receive your pay cheque, everyone including the government is after your hard-earned dollar. It’s all in the marketing you see — everyone is trying to tell you that their product is worth your dollar.

Photo Courtesy of Toni Verdú Carbó

The reasoning that often follows is to weigh the things that we want against the things that we need. Sometimes the two get mixed together. This may be followed by the reasoning that poses the question — how frequent will we make use of this thing that we purchase?

I propose that we look at things this way. How many hours of work do we put in, just so that we can afford to buy [insert product]?

The question becomes … if we do not use a dollar value, how can we determine the true value of a product? How do we define value? Value can be in this case (without referring back to the crazy economic theories) the net worth of how much we desire a product that we are willing to exchange the hours of work from which we earn a wage.

The reason why I remove the dollar value from this perspective because the dollar bill itself has a tendency to eliminate (or make us temporarily forget) our ability to reference in our mind how much work we really put in for those hours of labour (skilled or unskilled). Don’t get me wrong now — the dollar bill itself becomes a reference for how much of it we are willing to spend but many of us tend to let go of how many hours went into that dollar bill itself.

By using time as a reference, we can then truly extract value from products worth extracting from. And when we extract value from products worth extracting from — we as citizens, customers, and stakeholders — impose a new value on all the products out there — time.

Time is a finite value for all of us (unless you are immortal I guess…) and as I point out to many businesses, time can never be recovered, but you can recover money (or even earn more) over time.

To Summarize

1. When thinking of purchasing something, think of how many hours of work you must go through in order to afford purchasing that something. How many hours of pointless meetings did I have to go through?

2. If deciding to purchase a product, ask yourself how many hours of [insert value: emotional, secular, spiritual, etc.] would be associated with the outcome of purchasing that product. Will I thoroughly use and enjoy this new DVD player? How often do I even watch DVDs?

3. Demand greater value from products. Businesses should be providing or injecting more value into and around their products. Really, if a business cannot think of ways of (or is unwilling to) injecting greater value into their product, then I would suggest that the product be cancelled. Think of the transition from VHS to DVDs — all those bonus features!

4. Impose the value of time on everything. Associate the hours you put in with values [i.e. obstacles, bosses, etc.] Were my hours of slaving away at work worth the $20 dollars spent on lunch? or that book? or that CD? that DVD?

5. Calculate your annual time budget. See how much you time you put into material products vs. activities.

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I am of course really simplifying this process but the point behind this action is for both businesses and customers to strive for waste reduction. This not only benefits everyone but also customers and businesses alike because customers would have a better idea of what they want and businesses would have a better idea of what they should produce.

Just like marketers often like to summarize consumer actions within a formula, by measuring our consumption by the hour — we have an opportunity to hone in on our own equation and define what we want — not what the marketer suggests to us.

Let’s put it this way. Calculate the value of a book in hours and then calculate the value of an iPod in hours. I’m in no way implying that one is more valuable than another — merely that it is extremely subjective. In that case, the calculation of hours can be a much better determination of value to a customer as opposed to a dollar amount.

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It’s rather funny. The value of time is often used for commuting, employment, business productivity, weekends, vacations, and travel — yet we rarely make use of this measurement on the products we purchase.

More on the value of time (Wikipedia).

And generalised cost.

Feel free to debunk this idea — it’s still whirling around my head … but I think it is still worthwhile to think about.

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