The Behavioural Economics Of How We Spend Our Time | Koen Smets | Modern Wisdom 127
Koen Smets (guest), Chris Williamson (host), Narrator, Narrator
In this episode of Modern Wisdom, featuring Koen Smets and Chris Williamson, The Behavioural Economics Of How We Spend Our Time | Koen Smets | Modern Wisdom 127 explores why Time Isn’t Money: Behavioral Economics Of How We Spend It Chris Williamson and behavioral economist Koen Smets explore time as our scarcest resource and why we systematically undervalue and mismanage it compared to money. They discuss concepts like opportunity cost, mental accounting, and deadlines, applying them to work, commuting, meetings, and personal life. Smets argues that awareness and deliberate planning of time can reveal hidden costs, improve decision-making, and reduce wasted effort—both individually and within organizations. They also examine experiments on speeding fines and charitable giving to show how people perceive the value of time versus money.
Why Time Isn’t Money: Behavioral Economics Of How We Spend It
Chris Williamson and behavioral economist Koen Smets explore time as our scarcest resource and why we systematically undervalue and mismanage it compared to money. They discuss concepts like opportunity cost, mental accounting, and deadlines, applying them to work, commuting, meetings, and personal life. Smets argues that awareness and deliberate planning of time can reveal hidden costs, improve decision-making, and reduce wasted effort—both individually and within organizations. They also examine experiments on speeding fines and charitable giving to show how people perceive the value of time versus money.
Key Takeaways
Treat time as your primary scarce resource, not just money.
Everyone gets the same 24 hours regardless of wealth, and once a minute is gone it cannot be banked or reused—so decisions about how to spend it are often more consequential than small financial choices we obsess over.
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Make opportunity cost of time explicit in everyday choices.
Whether it’s driving 20 minutes to save a little on fuel or sitting in traffic daily, we rarely calculate what else we could be doing with that time; consciously asking “what am I giving up by doing this? ...
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Use “mental accounting” for time to protect what matters.
Just as people create virtual pots for money, you can earmark blocks of time for deep work, rest, or family and treat those blocks as non-fungible instead of letting any random task expand to fill them.
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Recognize and reduce invisible time-wasting externalities at work.
Decisions like over-negotiating with suppliers or calling unnecessary meetings can consume colleagues’ time without any clear ‘price tag’; building awareness of these knock-on effects can improve collaboration and productivity.
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Design consequences to be timely and salient, not abstract.
The Estonian speeding experiment—offering drivers a choice between a €400 fine or waiting an hour—ties the punishment to the immediate time-cost of speeding, likely making behavior change more durable than delayed monetary fines.
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Understand that others often value donated time more than money.
Studies show people see volunteering time as more praiseworthy than giving an equivalent monetary amount, partly because everyone can vividly imagine sacrificing a week of their own limited time.
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Use deadlines as tools, but don’t let them force bad trade-offs.
Self-imposed deadlines increase focus and counter Parkinson’s Law, yet rigidly obeying them can push you into suboptimal decisions; occasionally missing a deadline for a significantly better outcome may be rational.
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Notable Quotes
“We either use time or we lose it.”
— Koen Smets
“At work, we treat our time as sunk—we’ve sold it to our employer.”
— Koen Smets
“Everybody, rich or poor, gets 24 hours a day. You don’t get 36 hours because you’re rich.”
— Koen Smets
“If we didn’t set ourselves deadlines, I’d have long given up posting a piece every week.”
— Koen Smets
“There’s no limit to how much money we can have, but we all have limited time—so it’s easier to imagine giving up a week than giving up a fortune.”
— Koen Smets
Questions Answered in This Episode
How would your daily schedule change if you priced each hour of your time as highly as the Estonian drivers who chose to pay €400 rather than wait an hour?
Chris Williamson and behavioral economist Koen Smets explore time as our scarcest resource and why we systematically undervalue and mismanage it compared to money. ...
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In what areas of your work or life are you creating hidden ‘time externalities’ that silently waste other people’s time?
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If you mentally ‘budgeted’ your time like money, which activities would you cut, and which would you protect more fiercely?
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Where are your self-imposed deadlines leading you to accept worse outcomes when a slight delay could dramatically improve quality?
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When you next donate to a cause, would giving time instead of money better reflect your values—and how would others perceive that choice?
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Transcript Preview
The Estonian Police in, a few months ago, I think, tried out on a particular piece of, of road, um, an alternative way of, uh, penalizing people who were speeding. In most, uh, countries, when you get caught speeding, you get a ticket and in some, uh, situations the fine can be quite, um, extensive depending on h- by how much you exceed the speed limit. But here in Finland, they come- they came up with a different idea, um, and so they stopped people speeding and they gave them a choice between paying, I think for a sort of, an average, um, excessive speed, the fine would be something like 400 euros, so just like a good 350 pounds, or they could wait for an hour. Just stay there for an hour and then they could be, could- they could go again. Didn't have to pay anything, but they just had to wait by the roadside for an hour. About half of the, the people they stopped opted to wait. About half didn't. So you can imagine, uh, from that how much these people value their time.
(wind blowing) I'm joined by Koen Smets who I've been fighting to pronounce that name, but I think I've managed to nail it. Welcome to the show.
Thanks very much, uh, Chris. Um, you did it, uh, proud. I think I've heard numerous, uh, strange mispronunciations, uh, mispronunciations of my name all the way from Akin to Cohen to Koen, um-
(laughs)
... and anything in between. So yeah, I think you, uh, you passed with flying colors.
Fantastic. Well, we've got over the first hurdle. Um-
Yeah.
... to the listeners at home, I'm, I'm starting to calm down a little bit now. Uh, you might not know, Koen, but I was away in Bali and while I was away it meant I couldn't record. Um, and you do not know true fear until you have a twice a week podcast publishing schedule and no podcasts left to publish. And that is, that is where I've been over the last couple of weeks. But, uh, very fortunately for the people that are listening, I have this episode with yourself, which I'm sure is gonna be fantastic, behavioral, uh, economics, and all sorts of decision-making theory that we're going to go into, which I can't wait to do. Also, coming up, Naval Ravikant's brother, uh, Kamal Ravikant, talking about, uh, Love Yourself Like Your Life Depends On It, his brand new book, uh, and a bunch of other people that are really, really interesting over the next couple of weeks. But today we're gonna get to talk about some behavioral economics and some, uh, classical, uh, working strategies for organizations, human behavior, decision-making and motivation. That's right.
That's the kind of stuff I do, yes. (clears throat)
I love it. I love it.
That's true.
So what have you been thinking about recently? We've got the, the world is our oyster. The world of whatever you've been working on is our oyster.
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