What’s More Important – Your Money Or Your Life?
In your job, are you making a living? Or are you actually “making a dying”?
Nowadays, many are working more, saving less, and getting into more and more debt. We compensate by living it up on the weekend.
Then it’s more of the same the following week. How many people feel more alive at the end of the day than at the beginning? If you don’t, maybe you’re really “making a dying”.
If that’s how you feel, then reading Your Money Or Your Life will transform the way you relate to money.
The Point Of Enough
Most people think that spending money, or just having lots of it will bring fulfillment. I know I struggle with this myself. But there’s a point we reach in our pursuit of fulfillment where we’ve finally had enough.
Enough to survive. Enough comfort. Even enough luxury.
At this point, we finally enjoy what money brings into our life, and we stop buying things we don’t need. Everything beyond this point is just. . . clutter.
How Do You Get To The Point Of Enough?
The book outlines nine steps. Though all nine are helpful, there are three in particular that really stood out to me.
Step 1: Figure out how much you’ve earned over your lifetime, and see what you have to show for it.
You can do this easily by looking at your Social Security statement. I actually did this for the first time in a couple of years. And while I don’t make a ridiculous amount of money, looking over the years of my employment shows that I’ve actually earned quite a bit.
The second half of this step is to see what you have to show from your years of employment. You can do this by calculating your net worth.
Are you happy with this number? Does the stuff you bought still bring you fulfillment?
Personally, I’ve bought stuff that I haven’t used in a long time. If I sold some of it, the net worth might be higher today, and I might be further along the road to financial independence.
What Is Money?
Green pieces of paper? Power? Security? These could all be valid definitions, but there’s a simpler one.
Money is simply something we trade our life energy for.
When we go to work, we pay for money with our time. This leads to the next step.
Step 2: Track Your Life Energy
After you understand that you trade your life for money, you can calculate how much you actually trade it for.
If you work 40 hours a week and bring in $400, you may think you earn $10 an hour. But think of all the indirect expenses that are associated with your job. If you didn’t need the job, could you reduce or eliminate some of the expenses, and save some of the time expenditures?
Here’s a few examples.
Commuting – Suppose you spend 5 hours a week commuting, and $10 a week for gas.
Meals – Let’s say you take an hour for lunch. Since you don’t have time to cook, you spend $5 a day eating out. Maybe you also treat yourself to a $2 cup of coffee everyday.
Decompression – When you come home, are you energized to begin the remainder of your day? Or do you turn on the TV to vegetate for an hour with some beer and chips? Let’s say this takes up 5 hours and $10 every week.
Looking at it this way, you’re giving up an hour of your life for $6!!! Less than minimum wage in most states!
Calculate Your Costs Using Life Energy
Now that you have your real wage, you can determine how much anything costs in exchange for your life energy. So if the iPad costs $700 and your real wage is $6, it’ll cost you over 116 hours of your life.
Step 3: Ask Three Questions To Transform Your Life
Since you can now determine how much anything costs in terms of your life energy, you can now ask the following questions to help you spend more consciously.
1) Did I receive fulfillment and value in proportion to life energy spent? Was the iPad worth trading 116 hours of your life? Maybe it is, maybe it isn’t. But this gives you something to compare your purchases to.
2) Is this expenditure of life energy in alignment with my values and life purpose? This one makes you ponder about your life overall. Maybe you think you don’t have enough time for family and friends. If you do, eliminating some of the stuff that costs you a lot in terms of life energy may create that additional time.
3) How might this expenditure change if I didn’t have to work? This assumes most people would prefer not to work at their traditional jobs if they had the option. Would you need to buy all that fancy clothing? Eat out everyday?
Not all parts of the book resonate with me. For instance, I think it’s a bit too tedious to track every penny that comes in and goes out of your life.
However, the minor issues don’t diminish the fact that there are still good points to take away from Your Money Or Your Life.
Have you tried calculating your real hourly wage? Would you spend more consciously knowing that you trade your money for your life?