Understanding Time Value: Generational Perspectives and Financial Planning

TFD – Discover how different generations value time and its impact on financial planning and work-life balance in our insightful article.

Americans are aware of the value of time.

Financial planning company Empower polled 2,204 persons between March 11 and 14 about the value of an hour of their time in order to determine how valuable they felt it was.

Americans valued their time at $240 per hour on average. And it places their perceived worth at $499,200 year, or roughly eight times greater than the average U.S. wage of $59,384, assuming a regular 40-hour workweek.

According to the report, a lot of individuals are willing to spend money in order to obtain a little more or lead happier lives since they place such a high value on their time.

“The pursuit of happiness is the race, be it a more harmonious work-life balance or a $7 cup of coffee every day,” Empower declared.

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Which age group is the most time-efficient?

The results demonstrated that the value you place on time varies with age.

• Born between 1981 and 1996, the millennial generation places the highest value on time; 25% of them estimate that an hour is worth more than $500, making them the generation with this highest value per capita. Just 6% of Boomers charged $500 or more for an hourly rate.
• According to Gen Z (born 1997–2012), an hour of their time would set them back $266.92.
• Born between 1965 and 1980, Gen Xers claimed that their time was worth $215.90 per hour.
• Boomers, those born between 1946 and 1964, estimated that their hourly labor was worth $137.19.

Due to their perception of wasted time—which includes the 2008 financial crisis, during which many millennials entered the job, and the subsequent volatility brought on by the pandemic—millennials place a higher value on time. According to Empower, Millennials claim that the high levels of school debt and the historically high rates of inflation and mortgages have deterred them from purchasing homes. These factors have also alarmed them.

To regain one hour of your time, what would you be willing to give up?

Because time is so valuable, 26% of Americans claimed they would accept a 15% wage reduction in exchange for more free time. According to Empower, millennials (41%) were the group most inclined to comply.

In order to free up time, Americans would also pay someone to complete tasks for them.

• Born between 1981 and 1996, the millennial generation places the highest value on time; 25% of them estimate that an hour is worth more than $500, making them the generation with this highest value per capita. Just 6% of Boomers charged $500 or more for an hourly rate.
• According to Gen Z (born 1997–2012), an hour of their time would set them back $266.92.
• Born between 1965 and 1980, Gen Xers claimed that their time was worth $215.90 per hour.
• Boomers, those born between 1946 and 1964, estimated that their hourly labor was worth $137.19.
• Born between 1981 and 1996, the millennial generation places the highest value on time; 25% of them estimate that an hour is worth more than $500, making them the generation with this highest value per capita. Just 6% of Boomers charged $500 or more for an hourly rate.
• According to Gen Z (born 1997–2012), an hour of their time would set them back $266.92.
• Born between 1965 and 1980, Gen Xers claimed that their time was worth $215.90 per hour.
• Boomers, those born between 1946 and 1964, estimated that their hourly labor was worth $137.19.

What gives someone a sense of wealth?

For most Americans, wealth is more than just having a large bank account. According to the poll, 63% of respondents claimed that having enough time to spend with friends and family makes them “feel wealthy.

If taking on debt results in extra free time or a special event, almost one-third of people say they are okay with it.

According to the report, nearly 40% of Americans believe that saving time is more important than saving money, and 52% of Millennials agree.

How much do you think that vacation was worth? Americans incur this level of debt in order to afford a trip.

How about funds for retirement?

According to the survey, 44% of Americans believe they started saving money early enough, yet nearly half of Americans believe they are running out of time to save for retirement.

According to the survey, 43% of respondents wished they could go back in time and start saving earlier, but nearly 50% stated they would rather retire later in life with less money than a longer retirement with more.

However, the majority of Americans continue to be “optimistic,” and “people may be further along than they think,” according to the survey.

According to Empower Personal Dashboard data, the average 401(k) balance is $291,810, and for individuals in their 50s who are getting close to retirement age, it soars to $580,259.