The 9 Steps of Your Money or Your Life

The 9 Steps of Your Money or Your Life

1. Making Peace with the Past. This is a two part step. One is to estimate how much money has run through your life thus far. This includes all money. Earnings including childhood, gifts, inheritances and found money. Unless you are 10 years old you may find it is quite a bit.  The purpose of this step is to let you know you actually do have money in your life even if it doesn’t feel like it.

The second part is to figure out your net worth. This is the value of your possessions minus the amount you owe.  Unless you have financial investments or own your home it is likely you will find you owe more than you are worth. This is OK. It is a starting point.

Don’t get frustrated. You are who the book is written to help. No Shame No Blame. No Guilt.

One hour will give you a quick look and you can move on. Don’t get stuck on this step.

2. Tracking your Life Energy. This is a two part step.You track your time and expenses required to keep your job. Working, commuting, preparation, extra education, and recovery time are all caused by your work. Owning or using a car, public transportation, clothing, education certifications and upgrading are all expenses that are part of your work expense. This will help you calculate how many hours you are spending on work and work related activities. This helps you calculate your Real Hourly Wage which is much less than your salary. 

The second part is what Grandmas considers the fun part. Track every cent you spend and every cent you receive or earn. This is our favourite part because it gives such great information. We buy a 5”X7” notebook from the dollar store every 2 years and use one page per week to track every cent of spending. 

To really understand how to do the program, download the Financial Integrity Program Guide. But for a quick overview of each step, explore the links below.

Unless you have financial investments or own your home it is likely you will find you owe more than you are worth. This is OK. It is a starting point.

Don’t get frustrated. You are who the book is written to help. No Shame No Blame. No Guilt.

One hour will give you a quick look and you can move on. Don’t get stuck on this step.

This is our favourite part because it gives such great information. We buy a 5”X7” notebook from the dollar store every 2 years and use one page per week to track every cent of spending. 

Once you track your expenses for a while patterns will emerge and you will identify categories. We have 10 categories for our monthly tabulation.

Mostly Fixed Expenses: These are expenses that would be difficult or slow to reduce.

Housing (Includes taxes, maintenance, telephones, internet, supplies for cleaning etc)

Food (Includes groceries)

Transportation (Includes car expenses, taxis, and public transportation) 

Pets (Includes food, veterinary care, pet sitter, other needs)

Irregular Fixed (Tax preparation, bank fees, professional fees and insurance, government ID, etc)

Medical (Insurance, over the counter medication, dental care etc.)

Clothes (Includes clothing, footwear, jewelry, laundry and dry cleaning)

Variable Expenses: These are expenses that could be reduced or eliminated immediately.

Gifts & Charity (Includes birthdays, Christmas, charity, wedding gifts etc)

Entertainment (Includes event tickets, restaurants, computer expenses, other activities )

Vacation (Includes Insurance and all travel expenses)

The 3 questions are 

  1. Did I receive fulfillment in proportion to life energy spent?
  2. Was this in alignment with my values, goals and purpose?
  3. How would this change if I didn’t have to work for a living?

For this we write a happy face or a sad face beside the amount spent. 

We kept a wall chart on our bedroom closet door for years. It kept us aware of how we were doing and how close we were to Financial Independence. It kept us aware that the less we spent, the less we had to save to be independent.

The longer we did this the better and more creative we got. There are a million websites and YouTube channels on this topic. People are very resourceful.

We both had multiple jobs for years. Grandpa worked at a club in exchange for a free swim every morning. It was a great trade.

In 15 years we reached our crossover point. Some people reach this very fast and some much slower. It is a personal decision and you can determine your own speed.

Investing to provide income is a skill. This is where Grandpa shines. He has done a great job of researching options and coming up what has been best for us. There is lots of advice, some of it good, some of it too risky for us. We made some expensive mistakes but because we were living below our means and staying focused on our goal we got there.

This is our ultra low tech tracking system. There are lots of electronic ways to do this but we are older than computers and it works for us. 😉

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Your Money or Your Life

The book Your Money or Your Life by Joe Dominguez and Vicki Robin was a wonderful tool for us to evaluate our spending and evaluate our progress. It is 9 clear steps to “Transform Your Relationship with Money”.   Unfortunately Joe passed away but Vicki continues to keep updating new editions and they have the same method and philosophy.

The steps are simple clear and well defined. By the time we found the book we were already pretty frugal with the goal of paying off debt, but this book helped us be more efficient. One of the steps is to make a chart (that we taped to our bedroom closet door) that kept us motivated. To this day we write down and evaluate everything we spend. It is not just about spending less. It is about spending on things you care about and not spending on things you don’t care about.

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If you want to work through the program you can use just the book or you can also use the free study guide from the website started by the New Roadmap Foundation.

http://newroadmap.pbworks.com/f/StudyGuide-ver-BSG1-ORIGINAL.pdf

If audiobooks are better for you the entire original book is on 4 discs that you can buy or listen to on YouTube.

The Journey Begins

Thanks for joining us!

As newlyweds (when dinosaurs roamed the earth) we started with a high debt load combined with entry level salaries. Thanks to our willingness to learn from others and adapt ourselves to the constraints upon us, we were able to live on 50% of our net income, pay off all debts including our mortgage within eight years. When “Grandma” retired at 47, this generated quite a bit of interest and questions about how we were able to pull this off. This blog is being written as a resource to people who are ready to walk the path to early financial independence.

 

Good company in a journey makes the way seem shorter. — Izaak Walton

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