Your Money or Your Life

YMOYL Book CoverThis book, first published in 1992 and written by Vicki Robin and Joe Dominguez has introduced to me an interesting way analyzing how you spend your money.

The authors equate your money as your life energy, because in effect, when you go to your job and do what you do, you spending your time in exchange for money. That isn’t a new observation, but they then add in non-reimbursed expenses that go along with work, ie lunches, coffee, gas, vehicle maintenance, clothing, job related illnesses etc. The list goes on. And it isn’t just the dollar amount they look at, hours are added in as well. This includes commuting time, getting ready in the mornings, and time spent shopping for work clothes etc. If you have one big chunk of time or money spent annually, it is broken down into an average weekly amount.

The starting point is your hourly wage, easily calculated by your hours worked per week divided by your income per week. For example, lets say your make $800 per week.

$800 / 40 hrs = $20/hr

Then lets say you’ve listed out all of your work related expenses and hours spent on average for the year, weekly you spend another $400 and 25 hours related to work. This is then added into the equation:

($800 – $400) / (40 + 25) = $6.15 / hr

HI Vacation PicThat result is your Real Hourly Wage, I don’t know about you, but for me this made for a huge wow moment. Holy Cow! It makes buying that new $100 rain jacket look totally different, when in reality it is going to cost you $100 / $6.15/hr = 16 hours of your life! Ouch. Or even worse, remember that week long $2,000 vacation you took last summer to Hawaii, that equals out to 325 hours of your precious life energy!!! Think about what that $400 / month car payment is really costing you.

After knocking you down with the real life energy cost of your oh so wonderful stuff, the authors then present you with actuarial tables showing statistically, at your age just how many hours you have left to live. This really put into perspective how my spending habits are shaping my future.

Have you had a similar experience after reading this book? time and money

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2 thoughts on “Your Money or Your Life

  1. I read YMOYL about 15 years ago, and immediately took action. We had two cars, one of which we never drove. It was paid for, so it seemed like it wasn’t costing us anything, except for the fact that we paid to park it underground every month plus license and insurance. Sold it for 400.00 and never looked back!

  2. Pingback: 2013 In Review | jlyblog

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