updated 6/9/2014 12:16:16 PM ET 2014-06-09T16:16:16

"Time is money, and money is time." That's the central lesson of Your Money or Your Life, the personal-finance classic by Joe Dominguez and Vicki Robin. "Money is something we choose to trade our life energy for," they write.

The authors argue that because you spend time in order to earn money, you're also spending time whenever you buy something. If you're a consultant earning $50 per hour, a new iPad doesn't cost you $500; it actually costs you 10 hours of work. And if you make $25 per hour, that iPad is twice as expensive.

This has some powerful implications. When you spend less, you can work less: Frugality buys you more time.

In fact, some savvy savers have discovered that extreme frugality is a direct path to early retirement, especially when combined with a high income. By maintaining an ambitious saving rate of 50 or even 70 percent in your 20s and 30s, you can retire when you're 40 instead of 65.

That may not be possible for everyone. But money can buy time in other ways, too. Toni Anderson runs a blog called In addition to managing her burgeoning business, she takes care of her seven children when her husband, a Navy officer, is deployed. She is acutely aware of the relationship between time and money, and she prizes efficiency.

Accordingly, she pays an assistant to process her e-mail and manage other routine details of her business, such as billing and collections, which frees her up to focus on the aspects of the company that only she can handle: maintaining relationships with clients and customers. "The key is to delegate the things you hate to do or that you're not good at," Anderson says.

Like many people, I pay an accountant to do my taxes. Not only is he better at this than I am, but it takes him two hours, whereas it might take me 20. I also pay a housekeeper to clean my home twice per month. Yes, it's expensive, but this buys me time to do work I'm better at, work that pays me money. In the hours freed by hiring a housekeeper, I wrote this article--and earned enough to pay her to clean for the next three months.

Of course, when you start a business, you tend to have more time than money, which means it makes sense to do things yourself. But as your business income increases and time becomes more valuable, the balance shifts. It becomes more profitable to pay others to handle the tasks that don't require your specific attention.

Ultimately, work-life balance is about managing the way you use both time and money. If a new iPad is worth 10 or 20 hours of your life, buy it. Otherwise, do yourself a favor: Hold on to that money so you can retire earlier instead.

Copyright © 2013, Inc.


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