Your Money or Your Life?

Over Christmas, I read a book called Your Money or Your Life, which I had seen recommended several times in online financial independence forums.

I do recommend reading the book in it’s entirety, as I couldn’t do justice to all the details in the step by step guide that it provides. But one of the key concepts from it that I really loved was the idea of thinking of money in terms of “life energy.”

This involves working out your ‘real’ hourly income, taking into account the unpaid hours of your life that revolve around work – such as getting ready in the mornings, commuting, up-skilling, decompressing after work – as well as expenses involved in working – such as the cost of commuting, professional registration, professional development courses etc. In my very first blog post I worked out that I spend on average 68 hours per week on work related activities, even though my actual paid time ‘working’ was 40 hours per week.

After that, consider your spending in terms of life energy, instead of dollars. Is that takeout you bought during your lunch break actually worth an hour of your life? I revisited my total 2020 expenses and reframed the spending in terms of life hours (and converted to life days as applicable as well, because some of those categories really added up!) Remember that ‘life days’ in this sense doesn’t just mean number of work days, this actually refers to number of full 24 hour days of life used up.

The next step in the ‘Your Money or Your Life’ process is to ask the following questions about each of your categories of spending.

  1. Did I receive fulfilment, satisfaction and value in proportion to life energy spent?
  2. Is this expenditure of life energy in alignment with my values and life purpose?
  3. How might this expenditure change if I didn’t have to work for a living?

In my case, I feel pretty neutral about most of my necessary spending, as I understand that it’s important/necessary but I don’t get joy out of them. I did put a down arrow for Q1 for tax and professional expenses though, just because those particular expenses always feel proportionally too expensive without any direct benefit to myself! But both those categories I expect to decrease after retirement. In contrast, note that while I rated satisfaction as neutral for health and phone expenses, their alignment with my values is completely the opposite.

When it comes to my splurge category however, I am generally fairly satisfied with my trade of life energy for what I received. According to this I spent 6 days of life energy on the holiday, but the holiday itself was 4 weeks long! Although, some of the spending for that holiday fell in the 2019 budget, but even taking that into account it is an excellent trade – and travel is something I definitely want to do more in retirement. Gift giving I rated neutral for Q2 mainly because I don’t feel like I spent enough on giving in 2020, so it’s misaligned with my values there.

And hoo boy, my eating out category! Definitely some discomfort looking at that row. I already felt that I spent more than I should on this category just from the dollar amount, but the fact that I spent nearly 70 hours paying for that? That really did blow my mind. I doubt I even spent 70 hours doing the actual eating!

I’d definitely encourage everyone to try this exercise out for themselves if possible. If you don’t have an annual budget/spending tracker, start with just doing this for one month’s expenses. If you don’t have a budgeting/tracking habit yet, I’d both recommend starting at least a tracking habit, and to use the actual book to work through the steps from the basics.

4 thoughts on “Your Money or Your Life?

  1. It’s an interesting perspective to take. I’m going to have to do this for my own at some point.

    I’m glad I’m not the only one with an eating out problem, though!

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  2. That’s such an interesting and fun concept! I would say you don’t need to be that hard on yourself with the eating out if it’s something you genuinely enjoy! I avoid takeout or convenience foods but I do enjoy having meals with friends

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    1. I agree about not being hard on yourself for spending big on things you genuinely enjoy! I don’t regret or feel guilty about eating out with my friends for instance. But fast food/takeout is something that not only do I overspend on, but it’s bad for my health and makes me feel both bloated and guilty afterwards. And in 2020 the ‘food’ category was almost all takeout on my own, not social eating. (I’m actually splitting it into two separate budget items for 2021!)

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