Keeping the Right Balance Between Money and Leisure.

In the past 20 years rising average wages have corresponded with people working longer hours. In many ways this is contrary to expectations; you would expect people with rising living standards to spend less hours at work, and use their increased earning power to enjoy more leisure time.

However, it seems increasingly common for people to spend more time working, no matter how much income they gain. How do we know when we have the right balance between earning money and enjoying leisure time? These are some suggestions to avoid getting the wrong balance between money and work.

1. Decide How Much Income you Need.

What income would enable you to do the important things and save a certain % for the future? If you work out how much income you need, this will enable you to avoid the trap of seeking to earn as much as possible. If you try to earn as much as possible, income becomes the sole objective and you end up with no time to spend it. Remember money is a means to an end, not an end in itself.

2. Place a Value on Your Leisure Time.

Work may give you $20 per hour. But, how much value do you place on your leisure time? Leisure time has a potentially great return than another $20 in the bank. It is not just about valuing leisure time, but valuing relationships. Many workaholics find that spending every hour earning money, inevitably leads to declining relationships.

3. Diminishing Returns.

The law of diminishing returns states that consuming extra units of goods leads to a declining utility. For example, your first bar of chocolate will give a certain amount of happiness. But, if you eat a second bar, it will give you less satisfaction. By the time you eat 10 bars in one day, it is giving no benefit at all (and quite possibly negative utility). This principle applies to most material goods. One car is indispensable, two is a luxury and three is unnecessary. Therefore, as you earn more utility increases at a decreasing rate. In simple terms if it may be good to work 40 hours for $40,000 a year; but, it doesn’t necessarily mean it is good to work 50 hours for $50,000 a year. The extra $10,000 is not essential, but you will notice the loss of 10 hours leisure time.

4. Don’t work for the sake of it.

Some people get into the habit of becoming a workaholic. This phenomena has been increasing in recent years. Often it occurs because people find a sense of achievement in work they don’t get elsewhere. However, the problem is that if we are totally focused on work, we don’t have the time or energy to work on our social life. Therefore, it becomes a vicious cycle. Don’t hide behind your work, there is more to life that just working and accumulating wealth.

5. Productivity not work.

People often make the mistake of equating time with output. Sometimes the culture of a workplace encourages people to stay a certain length of time. A good lawyer friend told me that the culture of his law firm meant that doing less than a 10 hour day was perceived to be a bad thing. Therefore, people would hang around until 7pm just to impress others. They might not have been doing anything productive; but, the important thing was that they had to be seen to be there. If you find yourself in this situation, try to change. Don’t seek to work longer hours, try to do more in a shorter space of time. What matters is productivity, not time wasted to impress the boss. If your work environment encourages excess hours, look for a more reasonable work environment.