- Money = life energy, you trade energy to make more. As you spend, you should ask is this worth my life energy. Think of this more like mindful eating vs hard rules of dieting.
- Step 1: start with personal balance sheet, calculating networth and also outlining how much you can liquidate items for
- Ask yourself questions about your relationship with money.
- Who gave you first lessons about money? What did you learn?
- What messages did you get about money forming up?
- Talk about early money memory, what does it mean to you?
- What does enough mean to you?
- What do you have that you can get rid of?
- You need free your mind from pre-existing attitudes about money, without this you won’t actually be able to believe enough is enough. Your emotional fortune is not tied to your economic fortune.
- When you’re financially independent, the way money functions in your life is controlled by you.
- Step 2: know the cost of your job (e.g. salary by hours put in and also the include the time and money you spend on to maintain job e.g appearance, training, commute, food, time it takes to decompress from work, if your vacation is just lounging on a beach bc you’re depleted then this is a work expense, job related illness, looking for jobs etc). You then use this to calc your real hourly wage
- Then later you can ask yourself, am I okay with this hourly wage and as you spend ask is it worth x hours of my life to buy a thing
- This exercise puts paid employment into a clear cut way and shows how much you actually get paid (e.g. no commute and fewer responsibilities may lead to a higher per hourly rate)
- Step 2: keep track of how much you make and spend (the goal is ask if the $ you spend brings back that much energy)
- For me, im curious how much I spend on ordering in, Ubers, flights, hotels, clothes, hair
- money talk questions:
- describe relationships with money in 5 or less, why those words?
- Do you experience more or les stress when you have $
- Finish sentence if I had more money then I’d
- What belief about money keeps you from being or doing what you want?
- Step 3: create your own monthly categories and sub categories that help you understand your spending habits. Do this by looking at your income and expenses over time. Categories could be food then sub categories grocery, ordering in, eating out. Drinks – coffee alcohol (make sure your categories reflect your actual behavior), housing – mortgage, utilities, any income you get from housing, wellness – products, services,
- Housing used to be 20% but now it’s creeped up to 40-50% (I know I need to bring mine back down)
- Ask these questions to reflect on dreams and revisit them frequently to see how your answers change
- What have you always wanted to do and haven’t done yet?
- What are you proud of?
- If you knew were going to die in a year how would you spend it?
- What brings most fulfillment and how is it related to money?
- If you didn’t have to work for a living, you what would you do with your time?
- Step 4 ask 3 questions about the money spent in each category
- Did I receive fulfillment satisfaction and value in proportion to my spend (use red yellow green classification to see where you’re getting satisfaction and should spend more)
- Is spending aligned with value and life purpose
- How might spend change if I wasn’t working for a living
- You can even do these on a monthly basis as you look back at your spending
- Use each question independently and use the three collectively month by month and year by year to spot patterns and get clearer on where you want to spend and get the most fulfillment
- Getting to enough has 4 components
- Knowing what comes in and out
- Internal yard stick of fulfillment
- A higher purpose
- Living for more than just yourself
- Step 5 chart income and expenses by month, leave room for income to grow, and use this to keep you honest on if your expenses are higher than your income
- FI = having a choice on what you do with your time bc you have an income (not paid employment) that supports your living expenses
- Think about the strategies you used to satisfy your needs e.g if freedom means travel then your needs are likely novelty stimulation routine break, needing idleness slow pace, meeting new people and culture, trying new food, being out of town and touch from daily requirements. Substitute these needs with local things that are equally fulfilling if you change your mindset
- As you think about buying ask what you’re really in need of. For example do you shop bc you need to feel like you belong or are wanted. Are there other ways to fulfill this need?
- Control your thoughts to control your spending. Question your thoughts and desires. Make sure spend actually aligns with fulfillment.
Work
- work used to be 3 hours a day in hunter and gatherer times
- Over time work has replaced the role religion used to play. It is not our social space and a belonging identity
- Disconnect work from wages (e.g say I’m passionate about teaching but I write software to make a living)
- Align work with you broader purpose (e.g. earn today to maintain savings rate and path to FI. Keep the lights on at home while I stand up additional income streams, end goal is sustainable income streams ie low stress, location flexibility, limited sync needs)
- Money talk questions
- How could you double income without selling soul or compromising health?
- Dream Job? Life’s work?
- Like and dislike about current job?
- What could you learn to do for love and money?
- What do you like to do and can you be paid for it?
- Also define wealth in terms of natural things like friends and family, learning, being present, community etc
- You can keep building skills post FI then if you need to earn from Skills again you still have them