How much are you really making in an hour of work? It’s important to know your real hourly because this provides a true assessment of the value of the things we buy. So the Mocha Java Chip Frap from Starbucks you just bought might actually represent a half hour spent working. The extra features on your new car might represent several weeks of work. With that information in mind, we can really ask: Is it worth it?
This episode dives into figuring out real hourly wage.
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How to figure out real hourly wage
- Start with pay stub
- Subtract from that amount all job-related expenses during your pay period. For example, did you have to buy new work clothes? Subtract that. Did you pay for a lunch meeting? Subtract that. Do you have to visit the chiropractor because of the stress work puts on your body? Subtract that doctor visit. This gives your adjusted take home pay.
- Figure out how many hours you worked during the pay period represented on the stub. This calculation should include commute time and all other time you spent on work-related tasks (whether you were officially on the clock or not).
- Divide your adjusted take home pay (step 2) by the actual hours invested (step 3). That’s the simple version of your real hourly wage.
You can get far more detailed. The book Your Money or Your Life has a very detailed formula. You can also use this handy spreadsheet from the cool site RadReads:
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