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Outsourcing in the New Year So You Can Do What Matters

January 10, 2022

We all know the classic saying, “time is money,” right? We also know that time and money are the two things we often wish we had more of. The key to time management and overall life quality will always be finding that balance between what you have to do, what you want to do, and figuring out how to afford it all.

I know that I usually share about financial planning topics here. However, today, I wanted to share about something that’s equally important and still related: The idea of outsourcing specific tasks and responsibilities in your life to free up time to do the more valuable – and profitable – things.

The Organization for Economic Cooperation and Development (OECD) ranked the United States 29th out of 34 countries in work-life balance. Outsourcing some of your daily tasks may be a more efficient use of resources than taking the valuable time to do it all yourself. Sure, we could all learn to change our oil or fix a leaky faucet, but by paying a professional to handle these tasks, we free ourselves up to focus on other things, like our work, which, in the long run, will make us more money rather than losing it.

For example, if you make $100 an hour at your job, and it takes you 3 hours to do a deep clean of your house, it essentially costs you $300 to clean your house. If you can have a service clean it for $150 in 3 hours, you’re saving money and outsourcing the labor. This is called “Opportunity Cost” – the next highest valued alternative use of a resource.

Outsourcing Can Save Money

I believe there are three essential commodities we trade, and most situations in life need two out of three of these: sweat (or energy), money, and time. It’s a great situation when you have a surplus of all three, but the usual case is that only two of these three are available, so there’s generally a trade-off.

For example, you may not be able to afford to refinish an old antique table, but with time and sweat, you could restore it yourself. Tending your yard, mending a tear in your pants, and baking something for your child’s bake sale need time and skills. If you enjoy doing them and have the time, that’s one thing, but if you don’t, it may be worthwhile to remove them from your plate. Remember that tackling a more significant DIY project could cost you money in the long run if you need to bring in a professional to fix your work.

Everything in life is a balancing game between how much time it will take and its cost. You may be surprised at how much more time and how much less stress you have when you outsource certain things on your to-do list. A good bookkeeper may help streamline your company budget and expenses, for example. Hiring a shopping service or an afterschool service for your kids can carve out more productive work time in your day.

The more space you free up from your schedule, the more you can focus on your actual paid work and the things you enjoy doing.

Other people think that they don’t have enough money to make charitable donations, but there are ways to give as little as $1,500 per year. Creating a small scholarship fund is one option. Additionally, being able to give clothes, household goods, or other valuables should not be discounted.

These are all deductible and can be listed on Schedule A of your federal tax return. You can save yourself several hundred dollars in taxes from this simple practice of non-cash donations, as long as you keep good records, and you can benefit the recipient in the process.

Unfortunately, people do make mistakes when giving up their money and assets. Let me show you five common mistakes most people make when gifting. Then I will outline the nine best practices for giving that will help you reach your gifting goals.

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Managing your wealth is a very personal subject, one we should discuss in a more personal setting.