Research reveals that Americans implicitly assign a substantial value to time, prompting a shift towards prioritising time-saving decisions that enhance happiness and efficiency, challenging traditional penny-pinching approaches.
Many people talk about saving money by clipping costs wherever they can, but the sharper test is often whether the saving is worth the time it consumes. The basic logic is simple: a small refund, a cheaper shopping trip or a fiddly workaround can look sensible on paper, yet still be a poor bargain if it eats up an evening or an afternoon. Economists call this the value of time, and in practice it is the hidden cost that can make a bargain expensive.
Research from the National Bureau of Economic Research helps explain why. A large study based on ridesharing data in the United States found that the average value of time was about $19 an hour, roughly 75% of the after-tax average wage. In other words, many people are implicitly assigning a substantial price to an hour saved, even if they are not thinking about it that way. The researchers also argued that time-saving improvements are often undervalued, which can lead households and policymakers alike to underestimate the payoff from faster transport, better technology and other conveniences.
That idea runs through practical money advice from major banks too. US Bank recommends economising by reducing waste, automating regular payments, batching tasks and trimming digital distractions, while Chase suggests budgeting, reviewing subscriptions and using shopping lists to avoid unnecessary spending. The common thread is not austerity for its own sake, but making spending decisions with a clear view of both money and time. A cheaper option is not always the better one if it creates frustration, delays or repeated effort.
There is also a personal-payoff argument. A study highlighted by ScienceAlert found that people who prioritise time over money tend to report greater happiness, regardless of how much wealth they have. That does not mean money is irrelevant, only that time is scarcer and harder to replace. The lesson is less about penny-pinching than judgement: save freely where the effort is minimal, but pay when it buys back hours you can use better elsewhere.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
