I mean this literally, do you know what the value of your time each hours, day or week is? This value is an important part of how you decide what to do with your free time and how you spend money. If you don’t know already read on to find out how to calculate.
There are a lot of different tools and calculators out there to figure out your real hourly salary and this is especially hard if you are a freelancer or entrepreneur and you don’t have a regular weekly or monthly salary to start with. That being said this past week I heard of a super simple way to calculate it on the Today Show:
“If you only know your gross salary per year, here’s a quick way to figure out how much you make (gross) per hour. Take your salary, $40,000 as an example, and divide it by 2,000 hours to get $20 per hour.
Two-thousand hours is the generally accepted number of working hours in a year, because it takes into account 40 hours a week at 50 weeks a year, accounting for two weeks of vacation, but no holidays, sick days or overtime.”
For the last few years I’ve had lofty dreams of doing a ton of research and self experimentation and figuring out an awesome ‘exactly how entrepreneurs can accurately find out their hourly rate.’ Naturally I realized this figure would be WAAAY lower than what I actually charge clients per hour. Before you go on your own you hear about all of the ‘unpaid’ hours and work you will have to put in, but still living in fantasy land, you chose to ignore this and forge ahead anyway.
Four years later, I can tell you for sure this number is higher than you can ever imagine and I’m still making nowhere near what I thought I would when I originally worked out the numbers. That being said, I would not change it for the world, I love it, blah blah blah, but seriously, its true. When I found this calculator I thought it was perfect and simple enough that I could table the extensive project and just go with this.
So my average hourly rate works out to be a bit below $45 dollars an hour. I honestly did not calculate this exactly, I have three incomes from the last year to take into account; clients and teaching at two different studios. As I start prepping my tax stuff for my accountant over the next few weeks I will get a better idea, but for now this will do.
What does it all mean??? Who cares?? Well everything!!! For ages I’ve felt that I wasn’t entitled to hire a real cleaning person to clean my apartment, I mean thats what really important high powered people like doctors and lawyers do, isn’t it? Me? A cleaning lady??? Then I realized YES! I probably spend about 4-5 hours cleaning my apartment each month (and I mean the stuff like sweeping, moping, scrubbing toilets, generally picking up and maintenance is not in this figure) and I hate every second of it. Once I got my figure I realized it is absolutely worth it to have someone come in. I got a recommendation from a friend and had a lovely lady come out and do an estimate. You know what I’m paying her? 50 dollars an hour!!!! That works out to just over an hour of my time! Crazy, I know.
Bonus! Here are two longer more detailed calculators you can use if you want a more exact picture, I haven’t tried them yet but I will be sure to let you know how I like them when I do:
Now that you have this powerful info find out what your hourly rate is and think of one thing you can afford to outsource today, I would start with something you really don’t like doing (just a thought… admin work, social media for your biz, household chores) and let me know in the comments!
This is going to be a game changer, I just know it!