Your Money or Your Life, Create a Budget (Free Money Finance)

Today we're going to talk about step #3 from Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century.

If you recall, last time we discussed computing your real hourly wage -- the amount you "really" make from your job after you add in all the extra time associated with it (commuting and so forth) and deduct the expenses (commuting, clothes, etc.) In general, we all probably make way less than we actually think as we trade one hour of "life energy" (as the book puts it) for money.

Step #3 has several parts but they really boil down to the following:

• Using the information you've gathered from tracking your spending by the penny, create a budget of your expenses (in dollars).


• Convert the dollars spent in each category into "hours of life energy" using the real hourly wage that you computed in step #2.

I really, really, really hope this is leading us somewhere meaningful. But since I haven't read ahead at this point, I'm not sure. I'm banking on the fact that so many people LOVE this book that it's all going to come together at some point. But here we are at 1/3 of the steps completed and I can't yet see the finish line. Maybe that's the way they want/like it.

It's not the budget part that's got me in a quandary (after all, I list developing a cash flow plan as one of my 30 steps to great finances), but the whole "hours of life energy" thing has me wondering. I realize that I'm trading time for money. I get that. I also get that for most people, what they trade an hour for is a small amount of money. Ok, fine. But what am I (or anyone else) supposed to do about it?

I know, I know, be patient. I'm sure they'll get to the point. But I'm anxious to get there NOW. :)

As for the suggestion of developing a budget -- good one IMO. This is a foundational step for anyone looking to better manage and understand their finances.

As for the whole "life energy" thing, I'm withholding judgment for now. I like it from the standpoint that it equates time to money because that's something most people don't think about (at least consciously.) And I like the "you make less than you actually think" line of thought because there are expenses that you incur from working that you wouldn't have if you didn't work. I just don't know how they are going to translate this from something that's kind of abstract into action steps that are concrete. It should be interesting.

BTW, I know many of you have read this book and know where it's going. Don't tell me!!! While I'm agonizing over the wait, I don't want to spoil the surprise. :)

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