Your Money or Your Life Summary: Chapter 2

In chapter two of “Your Money or Your Life,” you are challenged to change your perspective of money.

This is basic money management. It is the day-to-day transactions in life. Incoming and outgoing. Getting paid and going shopping.

This is your ‘money personality.’ It is your relationship with money. Some labels connected to this are frugal, stingy, generous, impulsive, a show-off, and more.

Are you comfortable talking about money, or is it a private, personal thing?

Do you consider yourself rich, poor, broke, well-off, or comfortable?

What does money mean to you? Is it security, power, evil, a right, or a struggle?

What is your money personality?

These days, money doesn’t inherently have any value. It’s pieces of paper, cheap metal, and data bytes.

What makes money valuable is our collective belief in it, and our perspective of money is often shaped by the society we live in.

In The United States, for example, more is often considered better, but in other countries, frugality is the norm.

As quoted from the book: “Money is something we choose to trade our life energy for.”

When all is said and done, you are the only one who can determine what money is worth to you. You get to choose how to earn it, and you get to choose how to spend it.

Contrary to popular belief, financial independence is not about getting rich. It’s about having enough.

When you can separate yourself from the practical, emotional, and cultural realms of money, you experience financial freedom at a psychological level.

You are no longer bound by the pursuit of earning more, just to have more. Now you focus your energy on earning for a purpose.

The amount per hour you get paid is not a true representation of how much you are trading your time for. There are many other expenses in time and money to take into account.

It’s time to calculate that time and money.

For example, how much does it cost you, in time and money, to get to work? Is it a $3 bus ticket and a 30-minute commute?

Or perhaps it is a 15-minute walk, or $10 worth of fuel and a 50-minute drive into the city. And if you do drive, don’t forget about the costs of parking, car maintenance, and buying your car.

Also consider work clothes, buying meals, the ‘reward’ you give yourself for a hard week at work, and so on.

Essentially, you want to calculate all time and money associated with your having to work. All the things that, if you didn’t have to go to work, wouldn't exist, or would be lowered.

For example, if you didn’t have to lay bricks all day, then perhaps you wouldn’t need that deep tissue massage every other week.

Or if you didn’t get so stressed out at those board meetings, perhaps you wouldn’t feel the need for a vacation two times a year.

Once you have the figures, do the following:

1. Add your extra work-related hours, such as commuting time, to your paid work hours.

2. Subtract all those work-related expenses, such as your work clothes, from your wage. For expenses that span the year, such as vacations, just prorate them.

With these new figures, you can calculate how much you are actually trading your time for.

Is it worth it?

That’s for you to decide.

If you love your job and it is how you want to spend your life energy, that’s awesome.

But if your job is just to earn money, can you find a better way? For example, now that you know how to calculate your real wage, it may actually be more profitable to take a pay cut if it means you don’t have to commute as far.

Also, the next time you want to buy something you don’t really need, you can directly correlate it to how many hours of life energy you are trading for it.

Is it worth it?

Again, that’s for you to decide.

The second exercise in this step is to keep a daily log of every cent that comes in and goes out of your life.

After doing this for a couple of months you may be surprised at what you actually spend your money on as compared to what you thought you spent your money on.

How you do this is up to you. I like to use a Google Sheet, but perhaps you prefer pen and paper, or an app. Whatever you do, be precise. Don’t “round to the dollar” or even to the nearest 10 cents. Be as accurate as you can. Track every cent.

Read the next chapter here.

Buy “Your Money Or Your Life” here: https://amzn.to/4gqQj94