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Blueprint 4 Greenbacks

Blueprint 4 Greenbacks

Uncle Todd's Money School

  • Organize Finances
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Step 09: Compare Purchases to True Hourly Wage

2023-09-23 by Uncle Todd 17 Comments

Determine your True Hourly Wage – Tax and Location Adjusted. This is a basic business metric every business tracks – and you should too.

Steps to calculate your True Hourly Wage:

  1. Figure out how much you earned last year after taxes.
  2. Then subtract all work-related costs (commuting, professional clothes, work-related meals, and other expenses you paid out of pocket).
  3. Then figure out how many hours you worked (including those at home), plus the hours you commuted, studied, read trades and attended other business meetings.
  4. Divide your after-expenses income by total hours worked to get your true hourly wage.

if you want, you can end here. I like to take it a step further, and adjust my numbers for the cost of living in my hometown. I actually live in a higher than national average city. So my money goes not as far as someone in the opposite situation. I account for that!

  1. Multiply by location adjustment to account for living in a relatively low or high cost area of the country. [Cost of Living Calculator]
    • YourTown USA = 130 vs US Avg 100
    • Multiply hourly wage by .77 (100/130) {or jus divide hourly wage by 1.3}

How much is an Hour of your time worth?
That’s how much you could actually sell an hour of your time for. Adjust as this number changes over time.

Using this number in real life:
If you’re thinking of buying a $1,000 television, you should know how man you need to work before you can buy that TV.  Is it worth 100 hours of your life to have that model? 300?  500?  How many hours does the $5,000 model require?

If your income is $30/hr adjusted for taxes, inflation, expenses and location, you know it costs you an hour of work to take a date to the movies – two if you share a popcorn and a soda!


Do you think at all about how much you have to work for a purchase – before you purchase it? As a way of determining – do I REALLY want this that badly? Let me hear from you.

Filed Under: Spending

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