Frugality is great. But some frugal habits save so little, they take more time than they're worth. So how do you decide which habits are worthwhile and which aren't? Trent Hamm of The Simple Dollar suggests calculating the "time value" of your frugality.

We've talked before about how there's more to finance than being frugal. In fact, some say being frugal is a waste of time. They argue that it gets in the way of more lofty financial goals, like earning more money.

The Simple Dollar's Trent Hamm agrees that we should avoid frugal tactics that have a "low financial reward." But, depending on your money situation, your idea of "low" might be different than the next person's. Here's his solution for weeding out frugal habits that aren't worth it: should stick with frugality until the "time value" of frugality is worse than the time value of your current job...In my eyes, it's worthwhile to spend a few moments assessing how much you really make at work and then using that as a rough benchmark for the other choices you make in life.

Here's how to start. First, calculate your hourly take-home pay. This is your hourly income, after taxes and mileage expenses and any other business expenses.


Then, calculate the "time value" of whatever frugal habit is in question. For example, let's say it takes you an hour to meal plan. And meal planning saves you about $25 every time you go to the grocery store. Is this amount higher than your hourly take home pay? In other words, would you save more by meal planning than you'd make working for an hour? If so, go for frugal.

Really, this is just calculating your hourly income and comparing it against how long it takes to do complete a frugal task. It's actually pretty simple, but he goes into a bit more detail in the full post.

If you're looking for a good balance of frugality, this might be a good starting point.

Spend Less? Earn More? Which Is the Best Path? | The Simple Dollar

Photo by MissMessie.
