Things You'll Need:
- calculator
-
Step 1
First determine how much money you make at your job. If it helps, you can use your income from last year. Don't include income from investments and such.
-
Step 2
Next, add up every single cost you incur for completing that job to make that salary. This includes gas, child care, office supplies (if you pay for them), work clothing that you wouldn't otherwise purchase, etc.
-
Step 3
Subtract the number in step two from the number in step one.
-
Step 4
Next, calculate the amount of time you spend each week being gainfully employed. Now, don't just say 40 hours. You need to include your commute time, your office meetings outside of hours, travel, overtime and work time at home, and any other time devoted to your job. Take the weekly hours and multiply the number by 52. So if you spend 47 hours working each week, your number would be 2444.
-
Step 5
Take the number you found in step 3 and divide the number by the number you came up with in step 4. In other words your real wages divided by the real time commitment. Usually, the number will be less than your regular "hourly wage."
-
Step 6
Now, to make this truly effective, consider what else you are capable of doing. Do you freelance occasionally? Do you have a hobby that could result in cash earned? Repeat steps 1 through 6, only this time include an estimate of this "additional cash" you may or may not be earning along with the estimate of the amount of time it takes.
-
Step 7
Now you have your "true" hourly worth and your "potential" hourly worth.
-
Step 8
Use these numbers to determine a lot of things. If your hourly is $12, and the neighbor's kid will mow the lawn for $10, it doesn't make sense for you to mow the lawn. But if he's going to charge you $15, you should mow it. Or, for example, if you spend four hours cleaning the house during the week and it takes your mind off your entreprenurial endeavors (the ones included in your "potential" equation) and your true hourly worth is $15, it would probably make more sense to hire a housekeeper. Here is why: a housekeeper will usually spend approximately eight hours on your house and charge you $100. In that eight hours, you could potentially make $120, so you're actually making $20 if you devote your time to work and not cleaning. Plus, you'll reduce the stress of having to clean at all and perhaps those few hours you spend each night dusting or doing a load of laundry, could be devoted tomaking that money you used in your "potential" hourly equation.
