I was reading something recently - maybe on Get Rich Slowly - in which some commenters were arguing about how to value the time that you put into doing something like cooking to determine how much cost savings you are getting out of it. The general tenor of this debate was that some people were wanting to reject money-saving, frugal options like packing a lunch to work instead of eating out as being a false economy due to the extra time burden. (This particular case was even weirder than most because at least one person was postulating that the time you spend at home making your lunch counts but the time you spend driving to a restaurant for lunch does not. So a lot of convenient rationalization was going on.)
One thing that always strikes me as ridiculous when I read this kind of discussion is that so many people suggest that you use the hourly wage you make at work as a proxy for the value of your time (e.g. if you earn $50,000 a year working 40 hour weeks, your time is worth $24 an hour). I can understand the basic logic behind this idea (opportunity cost), but what world are they living in that they think many of us can choose how many hours we work on some continuous scale? I mean, if Mr X really had the option of working for an extra hour and getting $24 for it, I could definitely see the benefit in his paying for the convenience of somebody else doing this other work (if he could pay them less than the money he would make in that time and it wasn't something he would get much or any inherent satisfaction out of), but he is unlikely to have that option. For most of us, there is no market for working one extra hour at our average hourly wage, so that is not our opportunity cost.
I don't have any hard quantitative rule like comparing to my hourly wage I use to determine whether to purchase convenience or not. I generally try to balance the expense against the overall onerousness of the task and where exactly I prefer that balance to be isn't even the same from day to day. I sometimes also think explicitly of whether I would rather spend my money on this convenience rather than on something else I could buy. And for my own convenience (ahem), I have determined that some ways of saving money are just too much of a pain to mess with; for instance, I could really work the grocery store flyers to identify loss leaders, but I find it hard enough to get to one store once a week that the idea of driving all over town to get the best deals doesn't seem worth it to me. And then I do things that seem just silly, like spending 30 minutes darning holes where my fingernails have snagged the fabric of my underwear rather than buying new. But hanging out, listening to music and doing a bit of handwork is a kind of nice way to relax to me and lets me feel good about being on the right side of the Reduce, Reuse, Recycle boundary in this small way.
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Valuing your time via your salary strikes me as silly too. It also seems to imply that the leisure time of a janitor is worth less than that of an attorney, which is not necessarily true at all, except insofar as the janitor can't likely as easily afford time-saving options. Which, I mean, I know that's kind of what it's about, but not really. It's got to be more relative to the money and expenses you have and your other goals.
I like your "Would I rather spend this money another way?" approach. It reminds me of the idea from economics that says [paraphrased and perhaps ill-recalled] that the last dollar you spend on every item buys you the same amount of utility. Which I guess just means it really reminds me of maximizing utility, which I don't believe is possible, but eh. What-the-fuck-ever.
I sometimes use a more direct income-related heuristic, like "If someone offered me $45 to clean my apartment, would I do it?" If so, I shouldn't spend $45 on a cleaning service, but if not, that's something I can at least consider. My question is actually only trivially different from "Is it worth $45 to have my house cleaned?" but sometimes that trivial difference is enough to make the issue more clear.
(Compare "If someone paid me $40,000 to die of colon cancer, would I take it?" to "If someone paid me $9 to make myself dinner, would I do it?")
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