I’m going to be referring now and then to how much time you have to work in order to pay for this or that. When looking at your rate of pay for the purpose of these calculations (or any similar figuring you might be doing on your own) don’t simply use your official rate of pay (or if you’re salaried don’t just convert it to an hourly wage based on a 40 hour week).
To find out how much you’re really making for each hour you work, first you want to look at what you’re actually taking home. Look at the net salary on your paycheck. The amount that actually gets deposited into the bank. Add any 401k deductions. That’s how much you’re really making. (If you’re really picky you can figure in the value of your benefits package, if any, but we’re trying to keep things simple here. This is a rule of thumb, not an income tax filing.)
Now, count up how many hours you actually spent working, or at work, or on your way to and from work, in that pay period. If you’re a full time employee that number is almost certainly going to be much more than a 40 hour week. You might be surprised how many hours it is.
Now, divide your real take-home pay by the real number of hours. That’s your real wage per hour, and the number you should use when calculating how many hours you’ll have to work to pay for something.
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