Posted
Jan 15 2008, 05:10 AM
by
Karen Datko
This post comes from partner blog Blueprint for Financial Prosperity.
During my research about flights for our honeymoon, the question of how much our time is worth has come up every single time we've compared flights. Do we want to spend an extra $100 each on flights and cut the travel time by two hours?
The answer, in part, depends on the value of our time, and we use a simple calculation to determine that.
Take your annual salary, divide it by 2,000, and then divide in half. The 2,000 reflects the number of hours in a year for your average professional -- 50 weeks of 40-hour workweeks (assuming 10 holidays sprinkled throughout the year) -- and then divide that by half. That half represents taxes, Medicare, Social Security, and a bit of a fudge factor -- and because dividing by half is easy. In actuality, taxes, Medicare and Social Security will represent less than half, but you add the extra just to make it "worth your time."
So, if you make $50,000 a year, the value of an hour of your time is $12.50 after taxes.
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