How to Calculate What Your Time Is Really Worth and Stop Selling It Too Cheap

Read time: 4 minutes

The 7-step framework that shows exactly how many hours of your life you're trading away—and how to get them back

Most people know their salary. Few know what their time is actually worth.

This matters more than you think.

Your time has a price tag. You trade it for money every day. But are you selling it too cheap?

Let's find out.

The 7-step framework to stop selling your time too cheap.

Follow these steps. Be honest with yourself. The results might change how you work forever.

Step 1: Define your ideal lifestyle

Take 5 minutes. Write down what your perfect life looks like:

• How do you spend your days?
• Who are you with?
• Where do you live?
• What activities fill your time?
• How do you feel most days?

Don't hold back. This isn't about what's realistic right now. It's about what you truly want.

Example: Morning meditation, working on meaningful projects, traveling quarterly, healthy meals, time with family, regular exercise, reading daily, and weekend hiking trips.

Step 2: Calculate your ideal lifestyle cost

Put a yearly price tag on that lifestyle. Include:

• Housing (mortgage/rent + utilities)
• Food
• Transportation
• Healthcare
• Education
• Travel
• Entertainment
• Savings (emergency fund, retirement)
• Debt payments
• Charitable giving
• Add 15-20% buffer for unexpected expenses

Example: $150,000 per year

Step 3: Determine your ideal work hours

How many hours do you want to work each week in your ideal life?

Be realistic about what feels sustainable and fulfilling. Not what society expects.

Example: 25 hours per week

Note: Why 25 hours? This isn't about working less for the sake of leisure alone. It's about creating space for what truly matters - volunteering in your community, making a positive impact, giving back to causes you care about, or pursuing meaningful projects that fulfill your deeper purpose. When income-generating work takes fewer hours, you gain time for service that may not pay financially but rewards in ways money cannot measure.

Step 4: Calculate your ideal hourly rate

This is simple math:

1. Multiply your weekly hours by 48 (assuming 4 weeks off per year)
2. Divide your yearly lifestyle cost by your yearly work hours

Example:

• 25 hours × 48 weeks = 1,200 hours per year
• $150,000 ÷ 1,200 hours = $125 per hour

This is your target. This is what your time needs to be worth to have your ideal lifestyle.

Step 5: Find your current hourly rate

Now let's see where you are today:

1. Calculate your current annual income (after taxes)
2. Estimate how many hours you actually work per week (including commuting, overtime, work emails at home)
3. Multiply by 48 to get yearly hours
4. Divide annual income by yearly hours

Example:

• Current income: $85,000 per year
• Current work week: 45 hours
• 45 hours × 48 weeks = 2,160 hours per year
• $85,000 ÷ 2,160 hours = $39.35 per hour

Step 6: Calculate the gap

Subtract your current hourly rate from your ideal hourly rate.

Example:

• $125 - $39.35 = $85.65 gap

This number tells you a critical truth: each hour you work now is worth much less than what you need for your ideal lifestyle.

Step 7: Create your action plan

You have three main options to close this gap:

Option 1: Reduce lifestyle costs

• Cut expenses to lower your ideal lifestyle cost
• Example: Cutting $25,000 in yearly expenses would reduce the hourly rate need to $100

Option 2: Increase your income

• Negotiate a raise
• Change jobs
• Start a side business
• Move to higher-value work

Option 3: Reduce working hours

• Work less but more effectively
• Cut commute time
• Eliminate low-value work
• Set boundaries on work time

Most people need a combination of all three.

The truth about your time's value

Here's the wake-up call:

If someone offered you $1 million today but you wouldn't wake up tomorrow, would you take it?

Of course not.

That means your life—your time—is worth more than $1 million to you.

Now look at your hourly rate gap again.

When you trade your time for less than it's worth to you, you're making a bad deal.

Every hour.

Every day.

For years.

This isn't just about money though. It's about honouring the precious gift of time you've been given in this life.

Each hour spent in work that doesn't align with your deeper purpose diminishes your potential for service.

Each day traded below its value is a day you could have spent in more meaningful pursuits.

The difference between your current hourly rate and your ideal hourly rate isn't just a number. It's the measure of conscious choice in how you spend your days.

Your next step

Complete this exercise today. Not tomorrow.

Put actual numbers down. Look at the gap.

Then ask yourself: What's one thing I can do this week to start closing this gap?

Because time is the one thing you can't get back.

To making a difference,

Dr Yannick