Your Money Or Your Life

Your Money or Your Life

When it comes to finding a career we truly love, one of the main things that can really hold us back is the lack of money (as well as large amounts of debt). I know this from personal experience because I was in this exact situation a few years ago. It can be really depressing when you find yourself in that “stuck” mode, where you have to keep your job in order to stay afloat even though you hate it. I might still be stuck in that same situation had I not hit my tipping point with office jobs and went through a financial overhaul.

Luckily, there is a solution to this problem and I feel that it can help people in just about any situation. What is it? Taking control of our personal finances. I know, the topic can get really boring, especially if all you do is read the “How to Get Rich” books that rehash the same content (save more money, make gazillions with real estate, etc.). It can also be overwhelming, especially if you find yourself in a tough position. But there is no better time to do an overhaul of your finances than right now.

In my book Life After the Cubicle I cover some of the basic finance steps I took to escape my job, which includes things like reducing expenses and saving up a nest egg. However, I HIGHLY recommend grabbing a copy of the book Your Money or Your Life since it covers these steps in detail. I can easily say it is the most interesting finance book I’ve read and it goes along with my own principles on living life to its fullest. It was written some time ago but all the principles in the book still apply, especially in the current economy.

Below is a breakdown of the five main principles shared in the book. While the book does cover a few more, I believe these to be the most important ones. Especially if you are new to the topic of personal finance.

Making Peace With The Past

Your Money or Your Life starts out with an introduction about why the “old road map to money” is no longer a good one. I completely agree with the authors and feel that a lot of us force ourselves into the money trap where we work ourselves to death in pursuit of money (myself included).

The book also addresses the problem of thinking we are our jobs. I have always hated the question “what do you do?” because it makes me feel like what I do for work is who I am as a person. This does not have to be the case. There is far more to us as human beings than what we do for a living.

Last but not least, it’s time to make peace with the past. Regardless of what situation you may find yourself in, just remember that going forward it can only get better.

Being In The Present – Tracking Your Life Energy

The next principle in the book is all about tracking the time you spend earning money. This is referred to as “life energy” in the book. If anything, it makes you realize that we do in fact exchange our life for money. We do this everyday when we perform paid employment, whether we like it or not.

However, the book takes it a step further and has you calculate the actual cost of time and money required to maintain your job. This includes things like transportation time and costs, the price of eating lunch at work, and other job related expenses. Once the total time and money is calculated, you then figure out how much per hour you actually earn. The number can be shockingly small, especially if you commute a lot.

Where Is It All Going?

Of all the principles in the book, this is my favorite one. Creating a monthly tabulation of every penny that leaves your hands is an amazing way to get a grasp of where all your money goes. You might even go into shock when you realize that small, frequent purchases can really add up over the course of a month.

As I mention often on this blog, one of the things that allows me to continue to work on things I enjoy is reduced expenses. And no, this doesn’t mean I live with my parents and eat rice and beans for every meal. I simply choose to spend my money wisely on the things I truly get fulfillment from. Tracking my spending every month allows me to keep my expenses in check.

I highly recommend giving it a try. At the very least, you will have a rough idea of where your money goes every month. From there, you can make adjustments and fine tune your expenses so they fit your lifestyle.

How Much Is Enough?

This is where the book really aligns with my personal way of living. There is a chapter in my book titled “A Million Is Not The Answer” where I talk about the idea of making “enough” instead of trying to make millions. If you do want to make millions, then by all means go for it! I personally feel like I can live my desired lifestyle on far less than a million dollars.

The real key is figuring out how much is enough for you. You might have a family and require more income to get by or perhaps you have little to no expenses so you can get by with very little. The important thing is to not go too far past enough. It’s been proven that a certain amount of excess money is a positive enhancement on your life but after a certain degree it can actually decrease your fulfillment. This is usually due to the fact that as you earn more money, you tend to sacrifice more life energy to get it.

Tracking Your Progress

Last but not least, it’s time to track your progress. Once you start monitoring your expenses, you can see how they compare to your income every month. The goal is to take the difference and invest it each month (retirement accounts, savings, etc.). You could also use the difference to get rid of any debt you may have. I did this for a long period of time and can honestly say that getting out of debt was one of the most liberating feelings I’ve ever had (even more than quitting my job).

Time To Get Started

While those are only a few of the principles shared in Your Money or Your Life, I feel that they are the most significant ones.

Being aware of your spending habits and defining enough are the two most important things you can do for yourself. You might just find that you can get by on a lot less money, which will open up doors to job opportunities you may have overlooked in the past.

Photo Credit: AaronPatterson

4 thoughts on “Your Money Or Your Life

  1. Ryan Dunn

    I read the book awhile back and really enjoyed it. It’s a lot easier of a read than most financial books and something I look back to from time to time to keep myself on track.

  2. John

    I read Your Money or Your Life years ago, and I really enjoyed it. Unfortunately, I got sucked back into the whole ‘to be in debt is to be American’ mindset and now I need to get myself out of this hole again. Thanks for reminding me about this book.

  3. The New Life

    I found this book a little over 5 years ago (May 2006) and I took it to heart! Over the past 5 years I have certainly become a middlemist. I would not say minimalist, but somewhere in the middle :) Because of this book I have been able to eliminate all debt, save some money, and prepare for a New Life! I was fortunate to have a nice six-figure income to help out. Needless to say, in exactly 7 days, I am leaving the corporate world and following my passion of a full-time internet marketer. It all starts with that first step and this book WILL change your life, if your open to it!

    Great blog Justin!!


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