Are We Choosing to Overspend for Services?

How services we pay for are robbing us of our money and our time.

I read a quote from Mr. Robert Kiyosaki , author of Rich Dad Poor Dad, “there are two types of people, the people you owe and the people that owe you.”To me the quote meant the following:

• We are both customers and service providers.
• We are both clients and consultants.
• We pay to have our needs met and we get paid to meet needs.
• We are both consumers and suppliers
• We are both buyers and sellers

We value our time and many of us make great attempts to control our spending. While there is no single recipe for business success, I think we can agree that changing the way we think and conduct business can positively impact our outcome in business. What do I mean? The statement “there are two types of people, people you owe and the people that owe you” is a different way to look at how we conduct business. From my perspective a simple business objective is to have more money coming in (people that owe us) than money going out (people we owe). How can that be done?

We have a level of control over the services we pay for and the services we are paid to render. Time management plays an important role in our level of control. We pay for services to free up our time and we perform services ourselves to save money. If there were a way to not overpay for services and give us more time to earn income, I am sure we would jump on it, wouldn’t we? Surprisingly the answer is no. Why, because we are more focused on saving money than saving time to earn more money. Generally, services we over spend on are the services that we perform ourselves to save money.

I observed this fact as I was rushing to press my clothes in order to finish working on a blog. I thought to myself if only I had more time, then I would not have to rush. At that moment it dawned on me. Just take the clothes to the cleaners. After I pressed my outfit I was very curious to see how much I was currently overpaying to press my clothes. I discovered a cleaners would charge me $60.00 to press a week’s worth of clothing (pressed not dry cleaned, $240.00 per month for both Shirts and suits). It took me an hour per night to press my outfit. The cleaner’s hourly wage for my shirts would be $12.00.

Let’s say my hourly wage is $60.00 including built in profit. ( (Hourly Salary + Direct Expenses/Hour + Indirect Expenses/Hour) / Profit % = Hourly Rate video to determine your hourly rate)

Performing the same service at my hourly rate would cost me $300.00 per week……. $1200.00 for the month. After looking at the numbers I discovered that I would gain 5 hours per week (20 hours per month) and have the potential to eventually increase my income by $960.00 Per month. ($1200 – $260).

Obviously this does not work for everyone in every situation; however I am certain there are services we are performing ourselves that are stealing our time which we can afford to allow someone else to handle at a lesser hourly rate. The difference in income to savings may not be as large, but over time it can make a huge difference and with due diligence in determining the hourly rate I believe we can find areas to save time, make money and not over pay for services. I am eager to know of discoveries made by others. I am hoping further light may be shed on other task we can afford to allow someone else to service at a lower rate.