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I have a friend at work named Geoff. He is obsessed with his hourly pay. Geoff knows what he makes each and every hour down to the penny. Before I met him, I never gave much thought to my hourly pay. I knew what my salary was and what I got paid every two weeks, but I had never broken it down into hourly increments.
Geoff, on the other hand, keeps a meticulous spreadsheet at work. When he receives a raise or a cost of living adjustment, he immediately enters it into his spreadsheet. After inputting, he proudly makes me aware of his $1-2 hourly increase and jokes around about what he will do with his newfound wealth. I always thought I was nerdy when it came to finance, but Geoff definitely nerds out way more than me.
Calculating Hourly Pay
For those of you wondering how to calculate your own hourly pay, you can take your salary and divide it by 2,087 hours. You may be thinking… this doesn’t make sense. There are 52 weeks in a year, and I work 40 hours a week. Shouldn’t I use 2,080 hours? The only problem with using the 2,080 hours number is that if you multiply 52 weeks by 7 days, the result is 364 days. This doesn’t account for a full year (365 days) or even leap years (366 days).
According to the OPM website,
“A General Accounting Office study published in 1981 demonstrated that over a 28-year period (the period of time it takes for the calendar to repeat itself) there are, on average, 2,087 work hours per calendar year. This average results from the fact that there are usually 4 years with 262 workdays (2,096 hours), 17 years with 261 workdays (2,088 hours), and 7 years with 260 workdays (2,080 hours). The 2,087 divisor is derived from the following formula:
(2,096 hours*4 years) + (2,088 hours*17 years) + (2,080 hours*7 years) / 28 years = 2,087.143 hours.
Using 2,087 as the average number of work hours in a calendar year reasonably accommodates the year-to-year fluctuations in work hours.”
Okay, let’s get back to the story now.
The Mind of Geoff
Geoff even assigns a dollar amount to his time spent in restaurants for lunch. He wonders if a specific spot is worth 15, 20, or even 30 minutes of his work time. He considers this so often that we all joke around with him about what type of minute-restaurant he is in the mood for. I’m sure it won’t surprise you that he’s a fan of 15 minutes or less, most of the time.
Searching for a New Fitness Class
The other night while I was driving, I was thinking about signing up for a new fitness class. Then, I heard Geoff’s voice in my head… Is the cost really worth it? The fitness class that I had been attending decided to drop it’s late night class. The 8 pm class was the only class that I could really make as I try to get home early from work to help my wife with our two kiddos. I have tried going to the early morning classes (at 5:30am), and I have concluded that they just are not for me. Those classes, however, were very affordable at $50 per month (unlimited).
In light of dropping that fitness class, I have been looking around at alternatives that might make sense for me moving forward. Crossfit has been on my mind, but it costs nearly a full days worth of work. Meanwhile, there are other options that cost only an hour of my work time. So, that makes me wonder whether Crossfit is really worth it. I also have to factor in the Internet options. There are numerous Youtube videos with great workouts that I could do for free.
Time for Money
That got me thinking. Essentially, when I go to work, I’m trading time for money. Now, don’t get me wrong, I really enjoy the work that I do. But, with any job, there are days that are more trying than others. Last week was definitely one of those weeks. Nothing went right, and problem after problem kept arising.
At that point, one of the few thoughts getting me through that week was early retirement. In order to reach that, I must be hyper-critical of everything that I spend money on. Especially knowing that by spending large amounts of money on things like workout classes, I stay at work an extra day longer than I want to.
With all that in mind, this upcoming year, I am going to be super diligent to ensure that I am value spending. That is, that my spending aligns with my desires, while also keeping early retirement in mind. I want to ensure that I am spending my time wisely. Unfortunately, social media is one of those time sucks for me. It may be free to use, but boy, does it waste my time.
Related Article: Do Your Values Determine Your Spending
I was talking about social media with a friend at church recently. We were lamenting about all the preening and the inflated images that people try to portray on there. Whatever happened to casually sharing fun moments with close friends and family? Today, everything seems more polished. Even “real” pictures many times are just people seeking to humble brag or receive compliments of sorts. It feels like everyone is either promoting their business or trying to convince the world (and maybe themselves) that they have the perfect life.
So with all that said, my plan for 2018 is to make sure that the stuff I buy and spending time on is really worth the hours involved. I want to add value to my life, not take away value. I’m going to think like Geoff a little bit more in different situations. What is really worth my time, now that I have a dollar-value associated with it?