What is your time worth?
If you’re a teenager, one good answer is “not much.” I sympathize: I earned $5 an hour at age 14 in 1993. That’s about $11 or $12 an hour after adjusting for inflation, but that wasn’t very much then and it isn’t very much right now. Why didn’t I earn more? Simple: I didn’t have (m)any valuable skills, and I was, like most other teenagers, notoriously unreliable.
But as I’ve gotten older, I’ve realized I was thinking about the value of my time all wrong. Median hourly earnings for economists, according to the Bureau of Labor Statistics, is about $50. While I didn’t know I wanted to be an economist until I was in college, I knew I wanted to make a good living. I wanted to be an orthodontist when I was in eighth grade, and a quick look at the BLS Occupational Outlook Handbook shows that they have average hourly earnings of about $129, which has me thinking maybe I should have stuck to that plan.
But bygones are bygones. I shouldn’t have been thinking about the value of my teenage time in terms of the skills I had right then and there (and what they were worth) but in terms of the skills I would require as an orthodontist or economist and what they would be worth in the future. Suddenly, $5 an hour to take care of a country club driving range doesn’t sound so great.
And that’s how you should think about the value of your time: look toward the future, not toward the present, and instead of saying something like “I hope to be an orthodontist” or “I hope to be an economist,” tell yourself you’re training to be an orthodontist or studying to be an economist—because after all, you are. With this in mind, it might be easier to say “no” to opportunities that look good in the short run but that will cost you in the long run. Maybe you forsake the opportunity to earn a few thousand dollars over the next few years, but it’s totally worth it if it means earning another $10,000 per year after college.
Again, this is hard to do. If I could go back and advise my teenage self, I’m not sure that conceited and clueless little punk would have listened. And of course, everything turned out wonderfully. However, if you think wisely about your time now, “everything turned out wonderfully” could have a completely different meaning.
The post Economist Explains the One Piece of Advice He’d Give His Younger Self was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.