On The Clock

We often talk and think about how much money we make in terms of an annual salary. Of course, that salary has to fund our lives even while we’re not working. In fact, it has to fund the hours when we’re sleeping and not spending any money at all. Well, we’re not actively spending money. We’re still on the clock for our mortgage/rent, air conditioning, electricity, subscriptions, etc.

So, I think it’s helpful, on occasion, to think of your salary in terms of a daily amount.

Daily Earnings

Here are a few examples, assuming 365 days per year, where annual salary / 365 = daily rate.

  • $50,000/year = $136.99/day
  • $75,000/year = $205.48/day
  • $100,000/year = $273.97/day
  • $200,000/year = $547.95/day

Hourly Earnings

Let’s take it one step further and calculate your hourly rate, again recognizing that what you earn while working must still cover your expenses while not working. Here annual salary / 365 / 24 = hourly rate.

  • $50,000/year = $5.71/hour
  • $75,000/year = $8.56/hour
  • $100,000/year = $11.42/hour
  • $200,000/year = $22.83/hour

So What?

I’m not suggesting you crunch numbers all day long and calculate every purchase in terms of your hourly rate for every hour of the year. I am suggesting that breaking down your salary in terms of days and hours might help frame certain decisions and provide some context.

Examples

For example, many people spend money on lunch during the workday. Let’s say that lunch can range from $5 to $12, depending on where you live, where you eat, etc. (I’m talking about picking up a sandwich, not a professional business lunch.) If you make an annual salary of $50k – $100k per year, your income per hour essentially covered that lunch. You better get back to work so you can buy lunch again tomorrow!

You might also ask yourself how many days you’re working just to pay your rent or mortgage or buy a car. This might provide a little bit of a gut check.

Let’s say you make $75,000 a year and spend $1,000 on rent each month. At $75,000 a year, your daily rate is $205.48 per day. In this case, you’re working about 5 days a month to pay for your rent.

Summary

Most of us put a lot of time into commuting and working. For many, it can be stressful and unfulfilling at times. If we’re going to put in the time and effort for the benefit of earning money, I suggest we buy things that really matter to us – both now and in the future. Your current self might thank you for buying those concert tickets, while your future self will thank you for saving for retirement. Spend money on what you value and in a way that allows you to truly enjoy life, while also cutting back on the expenses you’ll (quickly) regret. You’re working hard to earn money. I think you should also work hard to enjoy it.


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