Is this the best use of my time? As a business leader, if you can’t answer Yes to that question for any given task you perform, then whatever you have chosen to spend your time on will be costing you.
The costs of poor time management are fourfold:
- Financial Cost
- Opportunity Cost
- Emotional Cost
- Physical Cost
Financial and Opportunity costs are generally pretty compelling when it comes to recognising and then challenging your poor time management habits.
Financial Cost – time is money
Thinking of your time in dollar terms is an effective way to stress test whether you truly value your time. Financial cost is just that — it’s the cost to you in dollar terms of each activity you engage in.
You need to know what your time is worth per hour. If you charge your time out on an hourly basis, then use this value. If not, a quick way to calculate a reasonably accurate hourly rate is to take your annual salary and divide it by the number of hours you work a year.
Apply your hourly rate to the activities you regularly perform. You can see below a few scenarios which have been extrapolated assuming, to make the maths easy, an hourly rate of $100:
- If you spend half an hour each day flicking through Facebook, your social media habit is costing you $18,250 a year
- If you spend 2 hours each work day responding to generic emails; attending meetings that don’t require your immediate attention; or managing any other administration rather than focusing on the business of running your business, that habit is costing you $52,000 a year
- If you spend 3 hours on Sunday cleaning your home, that habit is costing you $300 a week, or $15,600 a year. That’s an expensive clean!
Opportunity Cost – it just gets worse
Opportunity Cost is associated with anything of value (financial or otherwise, such as a lost benefit or pleasure) that you have to give up to acquire or achieve something else. The cost is that of the missed opportunity.
Regardless of how you choose to spend your time, there will always be a Financial Cost plus an Opportunity Cost.
Taking the above 3 scenarios by way of example, in addition to the Financial Cost of spending your time on the (wrong) tasks, you need to add your Opportunity Cost to the equation:
- Half an hour each day on Facebook amounts to 182.5 hours a year. What else could you do with that time? Your Opportunity Costs are limitless, including for example, a session at the gym; an extra half hour with your kids; additional strategic thinking time each day; a little extra sleep.
- 2 hours a workday on administration totals 520 hours a year. Your Opportunity Costs here a massive — precious time to win new clients; seal new deals; and take on the world
- Cleaning your home on Sunday can rob you of a bike ride with your kids, having a long lunch with friends, or taking a hike in the mountains. The sky is the limit.
When it comes to costing your time management habits you need to be mindful — for each task you perform, ask yourself this: Is this really the best use of my time? If you can’t answer yes, then it’s time to move on to something more productive.