Learn how to calculate how much you need to earn to cover your life costs; designed for the creative entrepreneur but is an excellent exercise for anyone! Includes excel mini-spreadsheets produced under the OAS Femcidi Craft Enhancement Training, Saint Lucia

1. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
Costing your Life
How to work out
what pay rate you need

2. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
What is your Cost of Living?
This may seem like a lot to do, but it is really worth it! You will
have a much better idea of how much you need to earn, so let’s get
going!
To start, you need to make a list of all the things you have to pay
for in a year
 Some will be easy – monthly utility bills & rent, for instance,
 Some you may have to keep records of for a month or two to get
a real idea – eg grocery bills, lunches, travel to and fro
 Some may be more difficult – medical, dental and other off and
on expenses, vacations, study, birthday gifts …
• We have created an Excel worksheet to assist you with
this, but please go through the PowerPoint so you really
get an understanding of what you are doing and why

3. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
Put values to all of these:
we have filled in amounts to demonstrate
ITEM – monthly payments COST
Phone, Internet, cable 300
electricity 200
water 50
Rent/Mortgage 1500
Medical insurance - (for you and kids?) 250
Life Insurance 150
Vehicle loan 1000
Vehicle running costs – gas and maintenance 400
Bus fares (kids) 100
Food, toiletries, cleaning for one month 800
Beauty/personal care – gym, hair, nails etc 300
TOTAL 5050

4. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
Put values to all of these:
we have filled in amounts to demonstrate
ITEM – annual/ad hoc payments COST
School Fees 500
School books 500
Home Insurance 1000
Vehicle licence 250
Car Insurance 1500
Medical, dental, vision excess to insurance 1000
Vacation 1000
Home repairs 1000
Vehicle repairs 500
Clothing 3000
Total Annual 10250
Equivalent per month 854

5. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
TOTAL Monthly Costs
we have filled in amounts to demonstrate
ITEM $
Total Ad Hoc/Annual costs per month 854
Total monthly costs 5050
Sub Total 5904
10% Contingency 590.4
Sub Total 6494.4
10% Savings 649.44
Total monthly costs 7143.84

6. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
Is this realistic?
 You may have a partner contributing to costs – so
you can reduce some of the costs included in the
calculation – BUT –
 It is good to consider starting with the costs as they
are, so that you get an idea of what you would have
to earn if you had to cover all your costs alone.
 So, on this basis – lets work out how much (lets
round up) $7150 works out to per hour of work

7. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
Your Hours of Work
 In a normal job, people work 8 or 9 hours a day – this
includes a paid lunch hour and two paid 15 minute
breaks – so ACTUAL productive time is between 6.5 – 7.5
hours a day
 To ensure we cover costs, we will work with the 6.5
hours productive time per day
 Again, normal jobs are 5 days a week – so
 6.5 x 5 = 32.5 hours productive time per week
 How many hours in a month? Well, there are 52 weeks in
1 year and 12 months in a year – so
 32.5 x 52 / 12 = 140.83 productive hours in a month

8. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
Your Hourly Rate of Pay
 We have 140.83 productive hours in a month –
let’s say that’s 140, (we round down so we ensure
we cover costs)
 We need to earn $7150 per month, so our hourly
rate of pay would be
 7150/140 = $51 / hour
 Now let’s think about that – do you charge
anything like that? Do you think that’s a high rate?
 What else do we need to take into account?

9. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
Your Hourly Rate of Pay
 What else do we need to take into account?
 What if you don’t work a full week?
 Minus any hours you don’t work from your ‘productive hours’
 What if you work more hours in a day?
 Add extra ‘productive hours’ to your total
 What if you take a vacation?
 Minus vacation hours from your ‘productive hours’
 What if you share bills with someone else?
 Reduce the amount when you calculate your costs
 How about Tax and NIC?
 Add in the appropriate tax for your annual earnings (wages,
not sales)

10. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
Your Hourly Rate of Pay
There are many variations that will affect your particular
calculations:
Try to list as many items as accurately as you can, for
instance, we did not include ‘entertainment’… Double-click
the tables to edit the numbers or download our ‘Cost
Calculation’ worksheet
While you are aiming to get a good idea of the amount you
should be charging for your labour, this is not set in stone
You may find, when we look at pricing your products, that you
can charge more for labour for some items and less for others:
The ultimate goal is to end up with
the income you need to live
It helps immensely in your quest to make a good living to know
the REAL cost of your time.

11. Author:
Finola Jennings Clark
for the Cultural
Development
Foundation, Saint Lucia
cdfstlucia.org
Alternative way to decide
While for any person, self-employed artisan or employed person,
it is worth working out what you need to earn for a year to cover
all the things you want to do, there is another quick option for
finding what hourly rate to charge your labour at for production:
If you had a job before or you know the rate of pay in any
industry / job you would qualify for, you can use that to work out
your hourly rate. For example, if you were a teacher and earned
$4500 per month, then you would use the equivalent and your
hourly rate would be $4500 / 140 hrs = $32 / hour
As you can see, this is MUCH lower than the cost of living we
worked out – so you decide –
 What is the lowest you can afford to work for and
 What are the things you can do without to lower costs?