Monday MOGO Tip: Calculate Your Real Hourly Wage

How much money do you earn from your job? Now how much of that do you actually get to take home? Does it seem like a decent trade, those hours of your life for the money that you're making?

Have you ever calculated the real cost of your job?

I know some of you may be wondering why on earth I'd bring up the cost of our jobs when so many of us are struggling just to find one, but we only have one life and so much life energy, so it's important to think critically and carefully about how we're spending that life energy. Knowing the real hourly wage of a job can also help you if you're trying to choose between different jobs, or if you want to determine how far it makes sense to live from your job, or if you want to find ways to curb expenses, and so on.

A few months ago I mentioned an exercise from the book, Your Money or Your Life, that asks readers to track every penny to determine whether our spending reflects our values. Another valuable exercise from that same book asks us to calculate our real hourly wage, which includes those hidden costs we often don't think about.

Your real hourly wage includes the monetary and non-monetary expenses that you have to "pay for" as part of your job -- ones you wouldn't have if you didn't do the work you're doing. For example, not only do you have taxes deducted from your paycheck, but you also incur expenses for items such as your commute to work (gas, maintenance on your vehicle, etc.); the special clothes you buy and what you spend cleaning and maintaining them; the meals you eat out instead of in; childcare; business expenses you have to pay for, etc.

And, in addition to those monetary expenses, there's the cost of your time beyond the 40 hours of your typical work week: time to dress & get ready for work; commute time; the extra hours you work at home; time you spend reading up on the latest trends in your field; the time you spend decompressing from the stress of your job, etc.

In the example given in the YMOYL book, the person making $15 an hour, when she deducts job-related expenses and activities, discovers that she actually makes a real hourly wage of $5 an hour. Here's another example, where a plumber is estimated to be making a real hourly wage of $17.20/hour instead of the $24/hour he thinks he's making.

Paying attention to our real hourly wage has helped my husband and I enormously in making important life decisions. We both used to just follow the jobs, whether we really liked them or not. But once we started factoring in all those other costs, we realized just how expensive a job can be, both financially and emotionally.

Calculate your real hourly wage and see if what you're trading your life energy for reflects your values and brings you joy and meaning.

~ Marsha

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