My last post list out two important points about time and money check out here I will simplify this and bring to your understanding what each point means:

Note this; For you to know the amount of time you invest to earn your money you need measurement that reveals the hours you are physically at work and the hours you are not physically at work. Look at this scenario;

You spend two hours commuting to work each day and 10 hours at work, then it reveals that it cost you twelve hours to earn money that day. Also, you need to add up in any time you spent within on a side hustle. If you use this figure, you are definitely getting out a complete picture of the total amount of time you invest each year to earn money.

The point is we may find it difficult to come up with an estimate for your time, you are not the only one, you will agree with me that most people have a vague sense of where there 24 hours go daily. Let's me say you are someone like this, you spend your 24 hours but you can't figure out hour you spend it, I will recommend that you should consider 2,500 hours per year as a starting point and I will base my review on this figure to guide on the value of your time.

Illustration

If each weekday you spend 10hours per day at work, doing tasks related to work or commuting to work, it means you will spend 50hours per week. Consider working for 50weeks which in a year excluding 2 weeks of vacation/leave, the calculation will give 2,500hours per year. With this calculation, I believe 2,500 hours will get you in the right ballpark.

If you have a processor app that tracks your working time for you it's cool ... Though I know of an app I have not to use it before it's called Rescue Time App.

Now, you know the estimate of your time, how do you determine how much you earned during the time you spent working. To know this is simple arithmetic; let's consider salary earner, look at your latest paycheck and multiply that by the number of paychecks you receive per year. Remember that you made have some side of hustles and freelancing gigs, include them also because the time you spent on those activities is included.

Now, you have a record of the total time and money earned does this amount worth your time? Calculating the value your time worth is by you divide the total money earned by the total time spent, whatever you get gives you the value of your time.

If 2,500 hours is your total hours for the year and you make $5,000/year then the value of your time per hour is $4.
If 2,500 hours is your total hours for the year and you make $609/year then the value of your time per hour is $0.24 (This is the minimum wage for a government worker in Nigeria)

Are this calculations right?

When I calculated my time with the value I was shocked because the value I got was much lower than what I am expecting and I feel the calculation is wrong. Reason this;

Do you ever think of freelancers charge $50/hour and never make $100,000 per year? Also, think on this, a consultant that charge $500/hours and did not make $1,000,000 per year, what is responsible for this?

I came to the understanding that per hour payment is for some of their hours and not all of their hours. If you use the above formulary I gave, dividing their income by the total time spent working, the value of each hour is much less what they charge for a given hour of work with a client or customer.

Let me make it clearer, any time we might know what we would charge per hour but we don't calculate how much time goes into earning money outside of our working hours. If I must go by accounting term, all time we invest to earn money is included in the picture of what our time is actually worth and this is usually much less what you would charge for an hour of work on your job.

When you have an appointment to deliver one-hour speech, do you consider the time you spent to drive from your house to the venue? Do you consider the amount of time you spent waiting for the seminar or presentation to kickoff? Do you consider the time you spent on the break?

Look at this little tips to know how much your time worth

• Market Rate Method

You are seeking writing jobs and you know the amount of time you have spent on yourself to become a good writer, don't short pay yourself. Look for the job you know you qualify for, check out the salary scale divide it with the amount of time you have invested on yourself for that year and get the value of an hour of that job if it's okay for you go for it.

• Cost Based Method

Position yourself as a boss and you want to hire someone to do a job for you. You have your price tag. First, divide the job into a specific task, and estimate the amount of time for each task. Thereafter plug-in your price for each task and find the average value of this... Now look at the initial price tag with the average value you get from your division does the price tag worth the value of your time?

A man that knows that his one hour worth $30 how will he wait for 30 minutes to receive a gift that worth $10?

You that already know in cents and dollar the value your hour worth you will definitely make better decisions every day. Oh yes, you know the worth of your time by calculation via your income, are you ready to see if your time is actually worth more? I will show you this in the next review...

Thanks for reading...

#1 Psychology In Time And Money

#2 Psychology In Time And Money

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