Black Thursday and the Value of Time

This past Thursday—Thanksgiving 2011—I was fortunate enough to spend the entire day with family.  We spent the morning as our household of four and shared the afternoon and evening with my parents, brothers and extended family on my mother’s side.  After our fill of family and food, we headed home just before 8:00pm (not without purpose, mind you—the Ravens game was set to kick off at 8:20pm).  As we drove through the town of Bel Air, Maryland we passed a Target and a Best Buy, amazed to see lines wrapping around each building with prospective deal-seekers spending their Thanksgiving night huddling for warmth, embracing the side of a big box store.

This phenomenon, I assume, was driven by a desire to be one of the first in each store when they opened their respective doors at midnight.  That’s midnight—the earliest possible moment a store could open and still call it the Friday after Thanksgiving.  Not to be outdone, in an act of supposed consumer benevolence (and arguably outright employee exploitation), the world’s largest retailer decided just to break the barrier by opening at 10pm on Thanksgiving.  Should we just get it over with now and rename Thanksgiving Black Thursday?

Unlike many of my personal finance blogosphere colleagues who’ve justifiably brought their wrath down upon the consumption worship that has become Black Friday, calling for an outright boycott on moral or frugal grounds, I’d like to take a different approach.  In my financial planning class, we talk a great deal about the “time value of money”—the impact of compound interest gained and lost over time.  This concept is practically the centerpiece of all financial planning (rightly or wrongly), but a topic that receives precious little attention is the monetary value of our time.

How valuable is your time?

How valuable is your time?  Well, for starters, how much are you paid?  Take your salary, add any bonuses or commissions and divide it by the number of hours you work.  (This is only a rough approximation not applicable for many who are unemployed, underemployed, retired or working for reduced or no pay.)  Glancing at the Bureau of Labor Statistics, we learn that “Management Occupations” have an hourly mean of $50.69 (or $105,440 per year).  “Computer and Mathematical Occupations” demand an hourly mean of $37.13 (or $77,230 per year) while “Mathematical Science Teachers” derive less annually ($73,480) but more per hour, thanks to summers off, at $41.75 per hour.    While you may very well be blessed with substantially higher hourly/annual compensation than those mentioned above, there are many who make far less. If you’re among them, I don’t need to remind you that though you may receive less compensation, you don’t work any less, so for the sake of argument, let’s assume a reasonable vocational hourly rate of $40 per hour.

Now take a moment to ponder this question: Is the time you spend at work your most valuable?  You may answer yes, but many will prioritize their time engaged in service or worship or pursuit of their favorite hobby as their most prized.  How about drinking in a new book, movie or long-awaited album from your favorite artist?  Or what about that 30 minutes each morning with nothing but your hot cup of coffee or tea and your thoughts, catching up with an old friend over a glass of red wine or toasting the birth of a new addition to your best friend’s household?  Many will rank their daily exercise or sleep as highly valued and even more will rate time spent with family and friends as priceless.

What is a reasonable premium that we could place on this time?  Even though it’s impossible to know, isn’t it likely that we’d value some of this time as at least double or even triple the hourly value of the very important time we spend on the job?  We could easily assume our most valuable time—time that we’ll never get back—is worth over $100 per hour!

How about the time spent at Best Buy from 5pm until 2am on Thanksgiving night and Black Friday morning to secure a savings of $300 on a 42 inch flat screen TV?  From a financial perspective, with an eye for the value of our time, those eight prime-time hours would appear to net a guaranteed LOSS of at least $500!

Let’s also not forget that whatever goods we capture in the hunt, whether at a full or discounted price, are depreciating in nature.  Their value begins to fade the moment we take them out of the box and we’ll likely be tossing them aside as worthless in under a decade, while our premium time is very often a legitimate investment in ourselves and those we love accompanied by compounding memories over the years.

Let me not oversimplify this to suggest that all things consumption-oriented are bad and the activities I tend to prefer are universally good.  After all, I do tend to spend “several” minutes each Thanksgiving Day engaged in the ritual of football spectatorship.  I’ve also heard from friends who enjoyed a rich time of fellowship joining a family member or friend on an early-morning shopping excursion.

But let us not forget that every minute of every day is spent—it’s up to us to spend it well.

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*This article also appeared on Tim's new blog on Forbes.com. Check it out HERE!