In the more than two months since my last post, some great changes have happened. Not only did we move away from the wackadoodle drug-abusing landlady (whose neglect helped our prior apartment catch fire) but…
I quit my job to pursue a long-time dream of self-employment. I am working eight fewer hours per week (32 total) and making more money than I did at my previous job, where I always worked at least 50 hours/week and often as many as 60 hours/week… which I suppose means I’m working 28 fewer hours per week.
My New Year’s resolution is to be as frugal with my time as I am with my money.
The Kick in the (U.S. Made) Pants I Needed
Why did I quit my job? A lot of reasons, but mainly the results of tracking my actual working hours for the entirety of 2012.
As 2012 dawned, I asked myself: Why do you track every penny spent on coffee but not every minute worked? Time is money. The work done to produce an income is a major part of any budget, at least as important as the habits that spend that income. So why was I only looking at half the picture?
On January 6, 2013, I tallied the results. I worked an average of 12 hours/week (beyond 40 hours) over the course of 50 weeks (I omitted two vacation weeks). 12 hours week x 50 weeks = 600 hours. 600 hours divided by 40 hours (a normal work week) = 15, 40-hour weeks.
I worked an extra 15 weeks in 2012. There are four weeks in a month, so that’s 3.75 extra months.
Salaried Employment as Highway Robbery
That’s the thing about being a salaried, vs. hourly, employee: you do not get paid for any hour over 40. The majority of salaries are based on a 40-hour work week. That’s part of what makes them attractive. But, every time I’ve been a salaried employee, there’s been an expectation that I work at least 50 hours/week and often more.
Assumptions like this are rarely stated in job listings but become clear after spending time on the job. Imagine what job listings would look like, though:
Junior IT Project Manager
You will gather detailed requirements from business users and report those to the appropriate technical people. You will be directly responsible for the successful delivery of these projects.
Great location in the west suburbs of Chicago just off the highway. Compensation 70K/year based on a 60-hour week, or about $22/hour.
Now, $1,346/week is definitely not bad money (before taxes). However, if you were an hourly employee at $22/hour, you’d make $880 for the first 40 hours, and time-and-a-half ($33/hour) for the additional 20 hours, giving you an additional $660: $1,540/week.
That’s almost $200 more per week. $200 x 52 weeks is an additional $10,400 year. That job listing would look even more attractive at $80,400 year, no?
But I Digress
That sums up the “why” of my transition to self-employment. I encourage you to do your own math around this: track your hours at least as well as you track your spending. Don’t forget to count those 20-30 minutes/night spent on email, either: they add up to money just as much as eating lunch out every day does.
I’ll be writing more about self-employment – the pros, the cons, the taxes, the saving for dry spells, and so on in the months to come.
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