From the three ways one could determine the value of our work, the hourly-based pricing model is probably the most popular one, as most other jobs we might have had (or still have) determine the value of our work on the merit of how much time we spend there.

But before we jump the gun, there is an important base question that needs to be answered beforehand: How much do we actually need? And I don’t mean how much we would like to make to buy a new phone or go on two more holidays per year — the emphasis is on need, not want.

And this differentiation between need and want isn’t some righteous buddhist exercise where we will be practicing some frugality mantra and effectively placating our inner capitalist demons, but a necessary calculation we have to make in order to establish our base line — our minimum required amount of funds, that we need to continue a normal, healthy lifestyle.

Also, the problem that can arise if we never figure this out is enormous; if for example I were to only do what most art-pricing videos and books tell us too (and I did this for far too long), the only thing I would need to figure out my prices would be to look at other, similar artists and how they price their work.

The problem? Have you ever heard of the platitude: The blind leading the blind?

Even if I just blindly trusted every one of my colleges and all the people online that I used for my early comparisons and price estimations, to have done their due diligence and found prices that were in tune with all the various factors, like the price of rent, food, bills … the basics really; even then, it would all be more akin to Oedipus leading a bunch of other Oedipuses; fun at the beginning, but horribly wrong over time (motherly shenanigans and all).

But the solution is quite simple: There is no one perfect amount of money any one of us needs to make, to be able to survive — let alone thrive. In the end it all comes down to being specific:

What I needed to learn the hard way was that regardless of what I wanted to make, in order to actually find that number — and it being even remotely realistic (it’s usually too low, not too high) — I needed to figure out what I needed to make first.

What were (and are) my core expenses that need to be paid each month (or year — car registration and what not)? How much money do I usually spend on food? How about trousers and stupid things like sweets? I took all of it and packed it up neatly into a Numbers worksheet (that’s Apple fan boy talk for Excel) and let my magical Turing machine do the calculations for me.

I ended up with a red number about twice as high as I thought it would be and even dividing it by 12 (to get how much I need per month) didn’t really seem to help! I effectively figured out that I spent almost twice the amount of cash than I thought I did, and most was on dumb crap that cost about a euro or two — the kind that makes you go: “Oh wow, just a euro! This isn’t expensive at all; I’ll take four please.” And you end up renting the 99c store, jut to be able to sell off the couple thousand euros of junk you bought so cheaply.

Come to think of it, this is probably how 99c stores breed.

After I established all of my expenses and the initial shock wore off, I finally knew how much my base line was. I added 10% for random events (but quickly decided to just stop buying as much crap and get the 10% of leeway the other way) and only then did I start to think about my prices.

But while I was going all in and wanted my work to pay for all of my life’s expenses, many might just want their art to actually pay for another holiday a year, but are absolutely content with having a job that covers everything else. If this is what you want, obviously take the amount that you need for your holidays or whatever else you desire (and make it a generous 10-30% more than you think you need) and go from there. 

And tomorrow, we take a look at the troubles of the hourly-based pricing model and why trading time for money could be worse, but surely isn’t the best way to go in the long run.