MetaGreg

A friend back in college once told me that he doesn’t measure his time in terms of minutes or hours but with pesos. I thought he was just drunk as we often were in college. Years later, when I started accepting freelance projects, I realized how important it is to put a dollar amount on every hour you work. The idea of dollarizing your time not only helps you in setting your hourly freelance rates. More importantly, it helps you make key decisions that affect your work, business, yourself, or your family.

You can focus on what you do best

When you dollarize your time, you can focus on your strengths and outsourcing your weakness will make sense. Working on SchoolPad (my first personal Ruby on Rails project) introduced me to the realities of working alone. I have to learn things like design and copywriting that I knew from the beginning would be hard for a coder like me. But, I had two things that will me help solve my problem – pride and money. I bought all the books I think would be useful and read them every day and night like I was preparing for a do-or-die college exam. In the end, I produced crap and had to beg a friend to salvage my work. After my SchoolPad experience, whenever I work on a freelance project, I make sure I identify the tasks that I can work on and find partners that can help me.

You will not be wasting time

I once complained to a friend that going to the movies is expensive. Then one time, he told me he got a discount (about $3 less) to the movie theater he was working for. He invited me to join him. The problem was it would be a 30-minute (at least) commute. Even if I brought my my wife and 2 kids, it still makes no sense to me. I would rather bring my family to the more expensive theater which is just 5 minutes away, and spend the hour playing in the park with my kids.

How to dollarize your time

The easy way is decide how much you want to earn every hour you work. If you set it at $40/hour, always remind yourself that your hour is worth $40. If you are unsure how many dollars to set, try this formula by Rob Walling (from the book Web Startup Success Guide):

Your $/hour = (current salary x 1.3) / 2000, rounded to the nearest $5 increment.
where 2,000 is approximate number of hours worked in a year

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