In order to be more vigilant about your time, use the right tools to save time, and understand why people should respect it, it is useful to calculate what your time is really worth, based on your current actual income and then what your future income goals are.
Here is how to calculate it:
- Determine your average monthly income: __________________________
Determine the number of hours you work in average each month:______________________
(Example: 45 hours per week X 4.2 = 189 hours!)
Determine the percent of those hours that are truly productive hours (subtract time spent in meetings, chats, coffee breaks, driving, surfing the web, etc.) – the average is about 40%: _____
(Example: 40% of 189 = 75.6 hours)
Divide your monthly income by the number of adjusted hours: ____________ This is your current hourly value.
(Example: $7,916 / 75.6 = $104 per hour)
(Example: $95,000 annual / 12 = $7,916)
Based on the example shown even at five-figure salary, your time is worth $100 plus per hour. Now think of some of the tasks you do throughout the day. Are they all worth $100 per hour, or is there a way to get them done in less time, that would be worth $100 per hour.
Wouldn’t it make sense to spend your time on tasks that will UPLEVEL the value of you and your company rather than maintain it? How much would you be willing to spend to save an hour’s time, how about five?
The next step in determining what your time is worth is to calculate what your income goal is.
For this exercise get a number is your head of what you want to earn in the coming year: ____________
(Example: $200,000 per year)
Divide by 12 to get your monthly income goal: ______________
(Example: $200,000 / 12 = $16,666 per month)
Divide it by the number of monthly workday hours: ________________
(Example: $16,666 / 189 hours = $88 per every hour)
Divide it to allow for unproductive vs. production hours. (Again 40% in average so use a .6 for 60% of your hours are productive if you want.) : ________________________
($88 / .6 = $146 per hour)
This is your target hourly income. Anything you do that earns you less than that ($146/hour) is a task robbing you of income!
Every time you take on a task or do anything, ask yourself is it going to earn you $146 per hour. If not do not do the task, or have somebody else, who makes less, do it for you.
What would you do what would you be willing to give up in order to save 1 hour for 6 hours? If you do something that saves you just 6 hours over the ENTIRE YEAR you will have saved yourself $876! I can think of a lot I would like to do with that kind of money.
Now that you know what your time is worth, use this number to help you make choices that will move you forward, and increase your income.