Everybody knows their answer to the question, “How much do you make?” After all, it’s central to everything we do – where we live, what we buy, what types of vacations we go on — it all stems from how much we make. But, what I want to know is, “How much do you actually make per hour?” Let me give you a hint up front, the answer is quite different from what your boss will tell you…
Here’s your typical weekday…
You hear the alarm at 6:00AM, hit snooze, hit snooze again, and again…and then you finally get your butt out of bed
You shower, get dressed, hop in the car…
And then grab a coffee on the way to work (you really don’t have time to stop…but you can’t live without coffee. That’s just how it is, right?)
You continue battling traffic and then finally stroll into work at 8:10am. Not quite on time, but close enough.
Your day is long and tiring and you finally get to the point where you can head home. You know, sometime around 6:15pm.
After driving next to all the other schmoes that live outside the city (because it’s the only way to afford life) for a solid hour, you arrive home.
You heat up the leftovers, sit in front of the TV and veg. It was a long day. You deserve it.
….and then you do it all again the next day. Are you starting to see where I’m going with this?
I want to know the answer to the question, “How much do you actually make per hour?” Which of course means, what is your job actually sucking out of you vs. what you’re really getting compensated? Let’s go through the steps and find out.
Step 1: Check how much you earned last year
This step is pretty simple. Either look at your pay stub at the end of last year or pull out your income tax returns. Both will tell you the same story — your total earnings over that year. As an example, let’s say you earn $30 an hour, or roughly $62,400 a year (2,080 working hours in a year).
Step 2: Subtract your work expenses
As you look at this step, you might think to yourself, “I don’t have any work expenses,” but I can almost guarantee that nearly every one of us has some form of work expenses. Check out these costs that are often tied to your work:
driving to and from work each day
buying snacks for the office
picking up your coffee on the way to work (if you didn’t work, you probably wouldn’t grab coffee each day, right?)
buying lunch at work (if you lived closer, you’d probably have time to pack your lunch instead of buying one each day…)
purchasing office clothes
buying gifts for your co-workers
This list could really go on and on, but based on your initial swag, how much do you figure you spend because you work where you do?
Let’s see, $3,000 for long-distance driving to work, $100 for snacks, $3 a day for coffee times 20 days a month times 12 months a year…$720, $8 a day for lunch times 20 times 12…$1,920, $400 for clothes, $200 for gifts.
That’s $62,400 of income minus…$6,340 = a real income of $56,060.
Step 3: Divide by your total hours away from your family
Your work hours should not be calculated solely by the number of hours that you’re working in the office (ie. 9 hours a day minus your hour lunch break), but how many hours you’re taking away from your family each year. Check out these bullets to get a gauge of how many hours you’re actually working per day and ultimately, per year.
Start with 9 hours a day that you’re in the office
Add your typical overtime hours
Add your drive time, both ways
Do you watch the news each morning or read periodicals to keep up with the latest in your job? (global news for business, medical magazines for doctors, etc.) Add this time as well.
Do you often check your email on your phone at home? Or answer text messages? Or maybe you even open your laptop at night? Don’t forget to add this time.
If you work on vacation (for shame…)…add these hours
Alright, so let’s keep our example going…
9 hours
plus about 1 hour of overtime each day and 3 on the weekends (figure an average 1.5 hours per weekday)
another 2 hours for drive time (1 hour each way)
15 minutes a day for global news
another 45 minutes (on average) for phone emails, texts, and the occasional laptop work
That’s 9+1.5+2+.25+.75 = 13.5 hours a day, which means 67.5 hours a week, and 3,510 hours a year.
How much do you actually make per hour?
Per our example above, our $30 an hour job is actually….
A real income of $56,060
Actual time away from family = 3,510
An actual hourly wage of $15.97
You’re almost better off working on the line at the factory down the road…
What can you do to improve your real hourly wage?
I bet your number is shocking. It can be so easy to just look at your pay stub and assume that our hourly earnings are exactly what we’re bringing home. It’s definitely not the case. So the next question is, what will you do about it? Here are some ideas that can dramatically improve your real hourly wage.
Find a job at a company that actually cares about your family. They’ll want you to limit your hours and actually spend time with your loved ones instead of checking emails and trying to work each night at 10pm.
Live close to work. When you cut your commute time from 60 minutes down to 5, it’s like gaining a quarter of your salary back.
Take the time at home to make coffee and pack your lunch. If you live closer, this actually becomes pretty easy and can save you thousands of dollars a year.
Want to stop earning half of what you thought you did?
Attack the three big points above. You might immediately say, “It’s impossible. The cost of living is too expensive where I work. There aren’t any family-oriented companies in my area. I don’t think I can give up my early-morning latte.”
Well you know what? When you start making excuses why things are impossible, life is never going to change for you. Instead of earning $30 an hour like you deserve, you’re going to keep earning $15,97. That’s just going to be your reality – not because that’s just the way life is, but because that’s the way you’re making life. If you really wanted life to change, you’d ask the questions, “What could I do to….
spend less money for work?
give more of my time to my family? or
advance in my career without giving up 13.5 of my best hours each day?”
Start asking the right questions and you’ll get the desired results.
So now I’m curious. How much do you actually make per hour?
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