Thinking About Rates: The Five Senses Approach

You might have read my article titled What Should I Charge for My Services?. But before I wrote that article, I had a zen moment when I wrote down the following to help make up my mind about my rates. This is not an exhaustive list – it’s just a rambling thought output that tries to provide a way of thinking about your finances.

● What should I charge?
⇒ You should charge what you need.

● What do I need?
⇒ You need all your expenses and all your savings and all your investments.

● What are my expenses?
⇒ Think about your five senses and your physical/mental embodiment. Usually, your expenses are related to your senses – which define you as a living, breathing person.

◆ Everything that you have to pay to see – Think movies, Netflix, new places and things.
◆ Everything that you have to pay to taste – Think food and drinks.
◆ Everything that you have to pay to hear – Think Spotify, Gaana, audio devices.
◆ Everything that you have to pay to feel – Think clothes, lotions, soaps, airconditioning, heating.
◆ Everything that you have to pay to smell – Think flowers and plants, perfumes, spices.
◆ Everything that you have to pay to own – Think gadgets, machines, tools, physical assets, EMIs, etc.
◆ Everything that you have to pay to use – Think subscriptions, house rent, house helps, doctors, accountants, hairdressers, etc.
◆ Everything that you have to pay to enjoy – Think vacations and entertainment.
◆ Everything that you have to pay for security – Think life, accident, and medical insurance.

● What are my savings?
⇒ It’s what’s in your bank account (ideally, six to nine months of expenses).

● What are my investments?
⇒ Whatever you put away in instruments other than a savings account – Think provident fund, fixed deposits, pension schemes, shares, etc. The sole purpose of investments is to pay for your future expenses. So, you have to have some idea about your future expenses, factoring in even unforeseen events, and plan your investments accordingly.

Basically, when we think about our rates, we should also think about our expenses. What we charge affects what we can spend. Likewise, what we spend should affect what we charge. If you can’t reduce your expenses, increase what you charge. If you can’t increase your fees, reduce your expenses. If you can’t do either, change your value proposition or market or function or industry. Something’s gotta give!

Photo by Karolina Grabowska from Pexels

Published by Anupam Choudhury

I'm a writer, editor, and blogger from New Delhi, India.

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