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Money Culture

The Real Cost of Daylight Savings

Changing the clocks twice a year could be costing Americans more than just an hour of sleep.

Rebecca Lake • February 24, 2022

Spring forward, fall back. It’s a simple way to remember which way to move the clocks for daylight saving time.

In spring, you lose an hour of sleep. In the fall, you get it back. But you also get to walk around for the next month wondering why it’s dark at 4 p.m. and where did the sun go?

Whether you call it daylight saving time, daylight savings time or daylight time, it can all add up to one big headache. And aside from losing a precious hour of sleep, it could be costing you in other ways as well. 

In This Article

  1. What is daylight saving time?
  2. What is the reason for daylight saving time?
  3. Daylight saving time can cost more than it gains
  4. Is there anything good about daylight saving time?
  5. Final Thoughts

What is daylight saving time?

Depending on who you ask, the idea behind daylight saving time could be traced back to Benjamin Franklin. 

In a 1784 essay titled “An Economical Project”, he suggested that going to bed earlier could be a simple way to save money on candles and lamp oil. And he’s often credited with the saying “Early to bed, early to rise makes a man healthy, wealthy and wise.”

Daylight saving time was first used in modern times during World War I. The Germans adopted it as a means of conserving fuel and the rest of Europe jumped on board soon after. The United States also adopted daylight saving time during the war but it wasn’t popular and didn’t last. That is until the idea was revived during World War II. 

President Roosevelt implemented year-round daylight saving time which stayed in effect until 1945. In 1966, the Uniform Time Act made daylight saving time standard. The current rule has Americans turning their clocks forward one hour at 2 a.m. on the second Sunday in March and backward one hour at 2 a.m. on the first Sunday in November. (Arizona and Hawaii residents get a break; they’re the only states that don’t follow this practice.)

What is the reason for daylight saving time?

You’re probably thinking, why do we voluntarily give up an hour of sleep? And that’s a good question, considering that many Americans get six hours of sleep per night or less, which is below the seven hours or more the CDC recommends.

The simple answer is that daylight saving time is supposed to help with conserving energy. By changing the clocks in the spring, you move an hour of daylight from the morning to the evening. So farmers, for example, would have more time to harvest crops. 

Then in the fall, you change the clocks back so that it gets darker sooner. In theory, people would go to bed earlier so they wouldn’t need to burn lights (or in the case of the Parisians that Benjamin Franklin was addressing in his essay, candles and lamp oil). 

But Ben Franklin didn’t count on one thing: The advent of modern lighting and heating systems. Which is ironic, since he’s considered to be one of the founding fathers of electricity. So, does daylight saving time actually save energy?

According to the Department of Energy, not as much as you might expect. A study of daylight saving time found that it saves about 0.5% in total electricity per day. That’s about 1.3 billion kilowatt-hours but that energy savings didn’t necessarily translate to any huge financial savings in the average household’s utility bills. 

Daylight saving time can cost more than it gains

Daylight saving time is supposed to give you an extra hour of sleep in the fall, which you lose again in the spring. But studies have shown that there’s more at stake than just a lost hour of sleep.

For example, some of the negative side effects of daylight saving time include:

Daylight saving time doesn’t sound that great when you consider the health toll it might be taking on the average person. And even if you manage to get through the time change without any noticeable health effects, changing the clocks could potentially impact you in other ways, including financially. 

For example, researchers have suggested that daylight saving time can lead to increased stock market volatility during the periods when clocks are changing. That’s not exactly good news for your portfolio if you’ve started investing a little money each month for the future.

Daylight saving time could also affect your paychecks if showing up to work tired means you’re less productive or the changeover has you so exhausted that you call in sick. At least one study estimates that daylight savings time costs the U.S. $434 million in lost productivity annually. One reason is that employees are more likely to engage in “cyber-loafing”, meaning they’re piddling around online instead of working, in the days following the time change. 

In a worst-case scenario, a daylight saving time-induced hangover could lead to a job loss if your employer believes you’re slacking off on purpose. That could put more pressure on your wallet if your income temporarily dries up. 

Is there anything good about daylight saving time?

Let’s recap what we know about daylight saving time so far. 

  • In terms of energy savings, daylight saving time doesn’t cut down on energy use as much as you might think.
  • It can lead to increased risk of health issues and traffic accidents, both of which can cost you money.
  • Employers may also see a widespread drop in productivity thanks to daylight saving time.

So does daylight saving time actually save anything? At the onset, not really. But when the clocks roll back in the fall, you might end up spending less money on things like dining out, entertainment and gas. Why? Because you may be staying home more often instead of venturing out since there are fewer daylight hours. 

That can be a silver lining if you tend to feel gloomy when it starts getting dark earlier. Once daylight saving time ends in the fall, that can be a good time to review your budget. You might be surprised at how your spending patterns change along with the clocks and what that can add up to for your savings account.

Final Thoughts

Daylight saving time can be a nuisance but it might be here to stay. The Sunshine Protection Act would make daylight saving time permanent if it’s passed into law. That means more sunshine all year long and no more changing the clocks. 

In the meantime, consider how you can protect yourself against any negative side effects–physical, emotional or financial–associated with the time change. 

Creating a bedtime routine, investing in a good pillow and keeping a close eye on your budget are just a few things you can do to keep yourself (and your bank account) healthy.

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