Yikes! Step 3, in Your Money or Your Life, is complete. Waking up from a long sleep, can be a tad difficult…
In this step we set up a monthly tabulation table, that included all of our expenses, income, and savings. Then we calculated the hours of life energy we are trading for food, shelter, entertainment, etc.
Below is a summary of Step 3:
- Discern your unique spending and income categories and subcategories from the month’s worth of entries in our Daily Money Log.
- Set up your monthly tabulation table.
- Enter all money transactions in appropriate categories.
- Total money spent in each subcategory
- Add up total monthly income and total monthly expenses. Total your cash on hand and balance all accounts.
- Convert the “dollars” spent in each subcategory into “hours of life energy” using the real hourly wage that you computed in Step 2.
Tracking expenses. Luckily we have been tracking our expenses for sometime, so I didn’t have to wait a month to complete this step.
But, I devoted a few hours to rearranging all the categories in our software program. This was a necessary step, rather than following a “set budget,” I created categories that accurately reflected where our money is going.
I am sure some categories will change as the months go on and we refine this system. But this was a great start, with more startling results!
Life Energy. Discovering the amount of life energy we are trading for shelter, food, coffee, eating out and more was crazy! Just for shelter alone, I trade 102 hours per month!
I started thinking more and more about our tiny house. If we can purchase our tiny house outright, that will free up a lot of life energy hours for us! Even if we have to take out a small loan for the tiny house, that will still save an incredible amount of hours devoted toward paying for shelter.
Completing these steps are scary and empowering because the authors force you to become educated about your true consumption and income patterns.
Message. One key message has resonated with me throughout the book: “No shame, no blame. What you are confronting is just the truth about the choices you’ve been making in your life.”
For more blog entries on this topic see:
