Debt is a method for transforming money you will earn later into money you can spend today. As such, not only does it reduce the amount of money you will be able to spend later (because you will be busy paying back your debt) but it also restricts your freedom to reduce your spending drastically should a life-changing event happen (losing your job and moving back with your parents).
I won’t go deeper into details – the simple dollar is a great blog that can tell you more about debt and money than I ever will, so just go and read it.
Today, I want to talk about another kind of debt – time debt.
Time debt happens whenever you transform time you have later into time you have now. If you don’t spend the time to pick up your package from the post office today, you’ll have to spend that time in the near future. Accumulating time debt could happen because you waste time on futile things (such as sitting in front of the television watching shows that you don’t really care about), or it could happen for perfectly reasonable reasons: start-up founders are constantly in time debt, because there’s so much they have to do to get their product out to market and find customers that non-profitable activities are often delayed months at a time.
Despite the popular saying, time is not money: there are a few key differences between time debt and money debt that you need to take into account.
1. There is no inflation.
Not only does inflation mean the value of money decreases (you used to buy a Foobar for $1, now you need $1.20) and thus makes money debt easier to pay back, but the revenue of individuals also tends to increase when they get raises or change jobs. In fact, taking on $10,000 in debt to start a new company that earns you $100,000 in the first two years is one of the ways you can leverage debt to improve your revenue and automatically make your debt easier to pay back.
You will have 24 hours to spend every day for the rest of your life, and a lot of that is eaten up by sleep and natural urges. On the long term, having kids and growing older result in less time every day.
The only situation where «I’ll have the time to do it tomorrow» is a valid excuse is when you’re expecting a significant deadline to blow over. If you’re leaving your day job or your children are moving out or your very important paper due on Monday is done, then you can expect to have some free time. But even then, never underestimate your standing debt: all that free time is seldom enough to get all those delayed and postponed things done.
2. There is no refinancing.
Refinancing happens because you just can’t pay $4000 a month on a $3000 paycheck, so a refinancing company comes around and pays those $4000 a month for you, and you pay them $2500 a month for twice as long. That’s because money debt does not have solid deadlines—its deadlines are liquid, because they can be paid for using more debt (which is what refinancing is).
By contrast, you can’t decide to work 40 hours today by using your free time for the entire next week. If you have a deadline that requires 40 hours of work and you only have 24 hours left, you’re in trouble. Your only solution is to move the deadline—the equivalent of missing a payment.
As a consequence, be extremely wary of looming deadlines involving your time debt. Try to get these out of the way as soon as possible (keeping only those actions without a deadline on your to-do list), and when you do delay them, make sure they are small enough items to fit within your time buffer (that amount of time you can use in an emergency by giving up on sleep and leisure), such as paying bills or replying to mail.
3. There’s no price tag.
One of the easiest things about money debt is that there’s an explicit price tag on almost everything you buy. When you shop for a $900 laptop, you know it’s going to cost you exactly $900 (because that’s what the order confirmation page says), so you can accurately fit it into your budget (for instance, you could decide to amortize it over three months by decreasing your daily «free» budget by $10 — or use a credit card and decrease your daily «free» budget by $11, but that’s another story).
There’s no price tag for activities. All you can do is estimate, and that estimation is seldom accurate beyond the ten-minute threshold for simple activities. Do you know long it takes to pick up some groceries? To cash a check? To prepare that cake you promised you’d bring to church on Sunday?
Our inability to accurately estimate the time cost of activities means it’s necessary to keep a safe buffer of time every day, just in case an important activity just bursts.
4. There are dependencies.
With money, there are usually no dependencies or constraints in the order in which you pay for things. If you need to bake a chocolate cake, you can buy flour first or you can buy chocolate first, or you can buy both at the same time. In terms of time, you need to spend time buying flour and chocolate before you can spend time preparing the mix and putting it in the oven.
Quite often, in complex activities, we estimate the time fairly accurately (I need ten minutes to prepare the mix and put it in the oven) but fail to take into account the dependencies because these only surface when you actually start planning the activity in detail. So, your ten-minute baking spree suddenly requires a half-hour grocery trip.
5. There are massive economies of scale
Modern industrialized society has already extracted economies of scale from everything. If you buy twenty packs of soap instead of one pack, your per-unit economies are not very impressive—you probably won’t even get a 50% price reduction.
On the other hand, driving out once to buy twenty packs is significantly shorter than driving out twenty times. As an individual, you cannot benefit from industrial-scale infrastructure: even if you wanted to, there’s no way for you to open one thousand letters to dilute the cost of finding the letter opener because you do not receive that many letters. The best you can do is buffer tasks that benefit from being done together: make a shopping list in advance to optimize the trip to the store and buy gasoline while you’re there, keep your non-critical mail around for a week before you sort through it on Sunday afternoon, cook one meal that lasts a few days…
6. There are no savings
If you don’t spend any money today, it just sticks around. In fact, if you only spend a little, you will accumulate savings that can be used to buy (part of) a house, or a new car, or a computer, or your wedding, or your kid’s college tuition, or whatever.
That hour you spent on the train today? You will never get it back. Every second of your time that you don’t spend doing something is wasted forever. And you only have so much time on this earth.
Unused time lends itself to reuse, especially with modern technology. That hour on the train could be spent eating, sleeping or playing (so that you’ll have more free time when you’re somewhere else), catching up with an old friend over the phone, working on a project (even as small as a blog post) or organizing your calendar…
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What are your considerations when saving time? Do you work with a time budget like you would work with a money budget? Do you have too much free time, or are you constantly running late?








Hi. I'm Victor Nicollet,
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