Money: What’s Your Hourly Savings Rate?

Old Fashioned Watch

Flickr Photo Credit: Jussi O.

This concept is one I learned from the Tightwad Gazette.

When you perform a money saving task such as making homemade pizza crust, calculate the amount of money saved and the amount of time it took you to do it. Then, use the time calculation to determine how many times you could perform that same task in a given hour. Take that number and multiply it by the cost savings achieved to get your “dollars per hour” total.

For example, if making a single homemade pie crust saves you $2.00 (this is a realistic number based on my last price check), and you can make 24 of them in an hour (I have a bulk recipe for this amount. It’s very doable in the time frame.), then multiply $2.00 by 24. Forty-eight dollars is your hourly rate. This figure goes up when you add in the time you will no longer have to spend on a given night preparing crusts for quiche or chicken pot pie.

If you get a part time job offer that requires you to maintain a car, wardrobe and commute for $8.00 an hour, you are clearly trumping that amount through your at-home efforts. Some tasks will earn / save you less money per hour. Some will save you more. But you can easily beat minimum wage without trying very hard. Trying to decide if your family can go from two incomes to one? Start calculating the hourly rate of some of the things you would have time to do if you were at home. You may be surprised at how easily you’ll be able to make the transition and always ensure to Check your credit reports before applying for any form of loans.