I highly highly highly recommend that everyone reading this go out and get a copy of this book. Reilly has been talking about it forever, and now that I finally got it I wish I would have listened to him sooner.

Your Money or your Life is a step by step guide to making you wake up and pay attention to where your money is going, and how you let it get there. If you are unhappy with your financial situation in any way, you need to get on top of it and this book is a valuable eye opener.

I consider myself very on-top of our finances. I can tell you the balance + or – 20 dollars on each of our accounts – from student loans to credit cards to our chequing account to our investments – at the drop of a hat. I can tell you what the interest rates are on all of our liabilities, and the current status of everything that is on either of our credit reports.

I also have a tendency to gloss over the big picture in my head, focusing instead on the here and now – where money needs to be to cover what, if I can make a purchase “work” right now with moving things around where required. We always pay more than the minimum payment on our debts each month, but I have a tendency to use credit more than I should as well. I never backed up and looked at the big picture quite as well as I should.

I now have, very clearly, all sorts of information.

– I know pretty closely what Reilly and I have earned in our lifetimes.

– I know our current net worth – what we have to show for all we’ve earned.

– I know how much time Reilly and I actually spend for each dollar we bring home – calculating in the extra hours and expenses to maintain our jobs such as clothing, lunches at work, drinks after work, commuting time etc.

– I know where almost every dollar we spent last month went.

– I know how many hours each of our spending categories cost us in real working time.

– We’ve contemplated our values, goals, and what is important to us.

– I’ve analyzed each of our spending categories to determine if the expense brought us fulfillment, and if it is in alignment with our values and goals.

– I’ve begun tracking a very simple yet sobering set of numbers, Our Income vs. Our Expenses. The expenses line is currently higher than the income. This will be going on our wall, as a daily reminder.

Going forward, we will continue to track each dollar we spend each month and categorize and analyze our spending in these ways. Once we’ve done this for a few months, we’ll begin to follow some of the later steps in the book, which focus around changing behaviours. That is, other than the changes that we’ll already have made simply by being more aware.

It’s funny. Even the very simple step of remembering to ask myself “Will this purchase bring me fulfillment? Is it in alignment with our values and goals?” before each purchase has caused my spending to go down in the few short days I’ve been doing so. It’s just a matter of being realistic, and actually paying attention to what I’m spending and on what.

On that same note… I used to track all of our expenses this way through online banking and Quicken, but stopped when the budgets never worked as there were always “unexpected” payments each month that threw the whole thing off. I realize now that – like diets – budgeting doesn’t work. The key is simply to track and pay attention to where the money is going, but not try to follow a strict budget as there are always unforeseen expenses and it will never turn out the way you expect it to, and thus you are always failing. So – I found my copy of Quicken, and installed it. After a while deciphering unclear error codes, I discovered that the banks no longer support Quicken 2000. They no longer support Quicken 2001 for that matter. As a result, if I want to use Quicken, I’m required to upgrade – for the tiny little cost of $100. Huh? I paid my dues when I bought the first version, and the program itself works fine. Intuit even still supports it insofar as upgrades and online support go, but it’s the banks that don’t. Go figure that they’re the ones who want everyone to spend the $$$ to upgrade a product that isn’t even theirs.

Anyways, so rather than shell out more $$ for the basic functionality I need, I spent an hour pulling all my transactions from the past month into Excel as a dump from online banking, which is thank goodness a simple procedure. I discovered it takes me no real extra time to categorize all my expenses and sum each category in Excel as it did in Quicken. That, and the ability to see my total income and total expenses, which I can, is simple, and easily doable in Excel. And I saved $100.

This entry was posted on Monday, August 4th, 2003 at 7:15 pm and is filed under Life. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.