Updated on 10.11.07

Your Money Or Your Life: Three Questions That Will Transform Your Life

Trent Hamm

YMOYLThis is the eleventh part of The Simple Dollar Book Club reading of Your Money or Your Life. Want to know more?

This section encourages you to ask three vital questions about each category that you spend money on, but I find it’s much better to actually ask myself these questions about every purchase. Why? They provide a realization of what you’re actually trading for some material good or transient pleasure.

First, did I receive fulfillment, satisfaction, and value in proportion to life energy spent? Remember that true hourly wage you figured? Divide the cost of the item you’re considering by that wage. That result is how many hours you spend devoted to work in exchange for that item. This is a pretty straightforward application of the idea of a “real hourly wage” – how much time is this item costing you?

The second question gets more interesting, though. Is this expenditure of life energy in alignment with my values and life purpose? This leads right into some serious questions about values. What are your values? It’s not an easy question to answer for some. I know it took a lot of soul-searching before I could really answer that question clearly. Better yet, what is your life purpose? That one’s not obvious for very many people.

Let’s look at that question in application: if I look at my values as being oriented towards my family and my writing, is the purchase of a Nintendo Wii in line with those values? I believe that it is, in that it provides a very clean opportunity to play games with my family (and also to unwind), but is it truly worthwhile?

Many people will often justify a purchase by saying that it’s essential to help them unwind, but the third question looks that right in the eye. How might this expenditure change if I didn’t have to work for a living? Would you stop having to buy things to “unwind” and “decompress” from work? Would you stop spending as much money on gas or on transportation or on clothes?

When you go through all of your expenses through these filters, you’ll likely find that your spending drops through the floor. I know it did for me – I realize quite clearly that my spending would change significantly if I were to make a significant career change in my life.

Tomorrow, we’ll continue on with an assessment of the answers to these questions, starting with the section entitled “Assessing the Three Questions” and finishing up the chapter. This section appears on pages 128 through 145 in my paperback version of the book.

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  1. The need to unwind may not be related to ‘life energy’ spent at work. One may not ‘work’ and still need to unwind at the end of the day.

    However its a nice to be open for other unwindig, or may I call ‘recharging activities’.

    Its acceptable to think that ‘life energy’ becomes $$ when we are at work. But work itself increases ‘life energy’ and not a drain on that.

  2. Marina @ Sufficient Thrust says:

    I really love the idea of analyzing an expense for whether or not you’d need it if you weren’t working a boring day job.

    I’ve noted my discretionary spending has taken a jump since I signed on for a six-month on-site gig and had to give up working entirely for myself for awhile. There are so many financial factors that go into it, and when you’re worn out after a day at the office, it’s a lot harder to maintain your willpower for anything (frivolous spending, eating right, exercising, etc.)

  3. Oswegan says:

    This is an interesting book – I read it years ago. Probably more than once.

    What really sticks with me is the idea of there being a cross over point, where your passive income from interest or investments equals or exceeds your expenses.

    What a relief that would be.

    You could kiss your nine to five goodbye and it wouldn’t even matter.

    Now that is peace of mind,


  4. Lazy Man says:

    “I know it did for me – I realize quite clearly that my spending would change significantly if I were to make a significant career change in my life.”

    I’m realizing that now that I am not working (by choice) in the traditional sense. It’s amazing how cheap it is to live if you try.

  5. plonkee says:

    I go out for a drink sometimes with friends to unwind from work, but if I didn’t work, I’d probably still go for a drink sometimes with friends. I guess if I didn’t work I would eat more cheaply/healthily – but to be honest I bet I’d treat myself occasionally anyway.

  6. Laura says:

    I come home and I immediately need a nap just to refresh and continue. I then usually feel a need on Friday nights to go out and do something. The poblem is that doing something involves spending the hard earned cash over something frivolous.

  7. trb says:

    Laura, the book tries to address exactly this problem. If you come home feeling this way, then your job obviously isn’t doing good things for your physical or mental health. If you need a Friday night to escape from your life, then your life needs improving! Are you doing what you love? Why not?
    (I’m not, exactly, either! But I come home happy and could live my daily life every day without complaint, I think…)

  8. lorax says:

    The first two questions are great. I’d also throw these questions at how you use your time outside of work.

    The last question was disappointing to me. I’m in Laura’s boat. I need a nap after work. Alas, I like my vocation, if not my job. :) And there were very few work-related expenses that I could cut if I stopped working. I’d probably need more cash to support my hobbies! Now that’s depressing!

  9. Pauline says:

    Sorry for this late response, I only started reading TSD a few days ago…

    I used to work in a job (doing social work in a deprived neighbourhood) that was asking quite a lot from me, so unfortunately I got sick from all the stress and I lost my job. Although my income dropped by 30%, I don’t really miss the money! (I live in the Netherlands, where we still have a rather good social security system)
    My job would cost me at least € 207 a month on housecleaning, to readymeals and processed foods, magazines and books from shops instead of the library’s…
    Now that I’m at home, I can use my time and energy saving money by visiting 2 or 3 supermarkets for their special offers, making homecooked meals from scratch, going to the library for my ‘reading nourishment’ and I clean my house myself now (with special thanks to Flylady).
    I’m still aving to put some money in my savingaccounts every month and my goal is to have a big enough fund to start out as a freelance writer.

  10. Pauline says:

    Well, reading and understanding a foreign language is certainly easier than writing a comment in that language ;)

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