October 15, 2015 in Smart Money

How to figure out what your time is worth

I’m Jean Chatzky, and this is Money Rules.

So today, we fill in the blank … Money Rule No. 9: An hour of your time is worth ______.

If you’re like most salaried workers, you’re unlikely to know your hourly rate. But it’s an important thing to know, because knowing the value of your time helps you figure out how to spend it wisely.

Here’s a quick and dirty trick: To figure out your hourly wage, drop the last three zeros from your annual salary and divide the remaining number in half.

An example: If you are paid $40,000 a year, your hourly wage is around $20. If you make $80,000, it’s twice that.

Got it? Now you can use it to determine what is worth your time. Need to paint your living room? If you’re not up to the task and you can hire out the job for less than you earn an hour, you should spend your time doing something else. If hiring out the work will cost more than you earn — or you’re one of the few people who really enjoys painting — put the drop cloths down and start rolling.