Your Money or Your Life

Your Money or Your Life is the ultimate guide to financial freedom, as it explores nine effective ways to stop living paycheck to paycheck, get out of debt, earn enough money to make more than just a living, and start living your life worry free from a financial point of view.

Any good plan has a foundation or a starting point. If you want to improve your relationship with money, you’ll first have to find out how much of it you’re spending.

Start by tracking all your past income and summing it up. Use old resumes, paychecks, or even information from the Social Security Administration. Sum it up, and make sure to include cash gifts and other income received in your life.

Now, take a look at how much you currently have. Include cash, money in the bank, stocks or bonds at the current market value, and your fixed assets, like a car or a house. Liabilities like mortgage, car payments, and debts, should be accounted for as well.

Now that you’ve added and subtracted everything you’ve pretty much acquired in your life, it’s time to look at your net worth. Make sure you keep tracking, and add and subtract accordingly. It only takes an excel sheet to better manage your finances.

Another important step in this process is to categorize your spending. Create sections like groceries, social activities, rent, and so on, and make sure to leave some room for savings. In other words, you’ll have to start budgeting. You don’t have to adhere to a certain formula, so just find one that works for you and your lifestyle. The important part is to start budgeting overall.

With budgeting comes a clearer record of your income and expenses. While it gets easier to track your expenditures, you get a fresh perspective on something bigger than that. Your life energy-to-satisfaction ratio. Let me explain! Essentially, when you’re trading your time to work and get paid, you’re giving away precious life energy. All of this will be in exchange for money that you use to buy necessities and pay for a life worth living. Now, if you put that down into numbers, you’ll see that you’re paid a certain hourly rate. But it takes time to prepare for work and money to buy work supplies, such as clothes or razors. Therefore your net income per hour may be much smaller than you thought. To put that into perspective, ask yourself if what you’re working for has a good life energy-to-pay ratio, and if not, consider lowering the costs associated with eating out, for example. If you don’t feel like giving away 20 hours of your life to pay for restaurant dates,…