Prior to making major lifestyle changes at the beginning of 2008, saving seemed to be an impossible dream.
Divorcing the car, downscaling, and reducing our consumption patterns have helped us save more of our income. But, we still have work to do. The tools provided in Your Money or Your Life have helped us a great deal and we aren’t even through the whole book yet!
Let’s talk about Step 5…
Step 5 is all about graphing! Creating and maintaining a chart of your total total monthly income and expenses is key to maintaining focus month after month. Like the entire program, this step is a long-term activity.
The authors argue, that the graph will give you a “clear, simple picture of your current relationship with money (life energy) as well as the trend of your financial situation, and the transformation in your relationship with money.”
Just like dieting, budgeting doesn’t work — the wall chart will be a reminder of our transforming relationship with money. What exactly is being transformed?
Impatience, denial and greed are actually part of what is being transformed. It takes time to reflect on our lives and see if we still want to go where we’re headed. Insight can happen in a minute, but growth happens over time.
RowdyReaders, take some time to ponder the following questions from the book:
- How do you feel about savings? Are you for or against it?
- If you don’t have a savings account does that compromise your self-image?
- Does saving seem like an impossible dream given your current financial status?
- What about your religious or political convictions about saving money? Do those play into your perspective(s) on saving?
For more on this topic, check out the following posts:
- Step 4: “How Much is Enough? The Nature of Fulfillment”
- Step 3: “Where is it all going?”
- Step 2: “Money ain’t what it used to be – and never was”
- Step 1: Your Money of your Life
{ 3 comments… read them below or add one }
I loved the graph! I kept mine going for about 4 years, but then my goals shifted and I started using Quicken to track expenses, so I stopped using my graph paper. I think I still have it, though.
A few years ago I decided I was going to leave my job in a year, so I saved aggressively to have a cushion to support myself for some time afterwards. It’s now one year since I quit, and my parttime income does not meet all my expenses, so I’m drawing on my savings to pay the bills (as originally planned). But I still ponder how/whether to save under these circumstances. Should I still continue to put some set percentage of my income into savings even though I’m also withdrawing more than that from the same account to pay bills? It’s clearly pointless from a strict numbers POV, but I think keeping up the habit even when it doesn’t actually accumulate anything might still be a good idea.
WOW — I am so impressed. It sounds like the program worked really well for you. I don’t think drawing on savings is a bad thing, especially if that was your initial plan.
Keeping up the habit of savings is a good thing — especially if you have any cash left over at the end of the month.
Thanks again for reading the blog and commenting.
I’ve found “pay yourself first” to be a better savings strategy overall; in my experience it’s too easy not to have any cash left over at the end of the month.
When I had an income greater than my expenses, I paid bills (including my savings deposit) and then I could spend whatever was left of my paycheck as I wanted. Now my current challenge is to stick to a set amount for groceries & incidental spending. I can’t trust myself to stay within a limit if I use my debit card, so I’ve been using the envelope method: I give myself an allowance in cash (keeping the month’s balance in an envelope at home) and I don’t use plastic to buy these things. In theory. In practice, I’ve got about $2 to last until friday, and I will probably cheat by dipping into next week’s allotment.