Maybe you charge $75 an hour. Or $100.

But that doesn’t mean you are actually making that kind of money. Why not? Because not every hour is a billable hour.

Let’s take a look at what you actually earn.

Assuming you work 40 hours a week for 50 weeks of the year, you work 2,000 hours a year.

If you gross $50,000 a year, and divide by 2,000, your actual gross income per hour is only $25 an hour.

If you actually work more like 60 hours a week to make that $50,000, your real income is just $16.66 an hour.

OK, now we have been smacked in the head with the brutal reality of our real income per hour, let’s look at how we can increase that figure.

First, do an audit of your day, in increments of 15 minutes, for a full week. In other words, find out how you actually spend your time.

How much of your time is billable? And of the hours you don’t bill for, how much of that time is a genuine investment in your business, and how much can you cut away will no ill effects?

Maybe you spend 8 hours a week on social media sites and reading work-related websites. Is that all necessary? Or could you get 99% of the same value in just 4 hours? That’s 4 hours saved each week. Or 200 hours a year.

Maybe you spend another 8 hours a week dealing with your email. I bet you could cut that back to 4 hours as well. Unsubscribe from all but the most necessary subscriptions. Answer emails two or three times a day, instead of every 10 minutes. That’s another 200 hours a year saved.

Maybe you spend 4 hours a week on phone calls with friends, possible prospects, contacts who may be able to help you one day and so on. Perhaps you can do that in 2 hours instead of 4. That’s another 100 hours saved.

And how about those deadbeat clients who pay you small fees, but make huge demands on your time? Get rid of them and use the time you save to seek out better paying and more professional clients. Maybe you can save another 100 hours a year by doing that. At least.

So far, that’s a combined saving of 600 hours a year.

Let’s assume the freelancer who is earning $50,000 a year does save those 600 hours. Now she is working just 1,400 hours a year instead of 2,000. And her real income per hour jumps from $25 to over $35.

What could you do with those 600 saved hours?

If you are happy with your income, you can take the time it in vacations. That’s a huge amount of extra vacation time. Or spend more time with your family by stepping away from your desk earlier each day.

If you want to earn more, apply as many of those 600 hours to billable time as you can. Do the math and you’ll see that by using those 600 wasted hours to do billable work at a real income of $35 an hour translates into an extra $21,000 a year.

You can do all kinds of math with this. But that’s not the point.

The point is to recognize that the money you actually make per hour is not the same as the figure what you bill your clients.

The smartest and fasted way to either cut back on your hours, or increase your income, is to become more efficient in your use of time. Cut out the wasted time. Trim the fat. Work smarter instead of longer.

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