I wasn’t always obsessed with personal finances…

While I’ve always been relatively responsible with money (I always paid all my bills on time, I had a healthy fear of debt, I never carried a balance on my credit cards, etc), my interest in it was mild at best.

Then, in February 2015, I read Your Money or Your Life by Joe Dominguez and Vicki Robin and EVERYTHING changed.

YMOYL is not a typical personal finance book.  Rather than providing concrete plans for paying down debt, increasing wealth or managing investments, it invites readers to ‘transform their relationship with money’.

Wait… what?!?!

In a nutshell, it’s about how we exchange our life energy for money, meaning that we go to work, and in exchange for the hours we put in, we get paid money.  We then use that money to buy things.  The more we buy, the more hours of our lives we have to exchange for it.  On the flip side, the less we buy, the more hours of our lives we free up to spend however we want instead of working for money.  Each and every purchase then should be viewed in terms of the hours we would need to exchange to make enough money to pay for it.  So instead of thinking that a new pair of shoes cost you $100, you should think of them as having cost you 5 hours of your life (if your ‘true hourly wage’ is $20/hr).  The point being that you should only buy things that are so important to you (that line up with your values and passions), that you are comfortable with exchanging the corresponding number of hours of your life for them.

For me, this perspective was truly life-changing.  It kicked off a long period of reflection and introspection that completely changed the way I look at things.

  • It made me reflect on my values and passions, and how I could direct more of my time, focus, energy and money on those and less on everything else.
  • It introduced me to frugality, minimalism and the concept of ‘enough’, kick-starting my ongoing journey to simplify and declutter all aspects of my life.
  • It has helped me recognize and overcome patterns of overconsumption and lifestyle inflation (Bigger, better, more, NOW! Must keep up with those Joneses!).

Practically speaking:

  • I started tracking all of our expenses, then set out to lower each one that didn’t align with our values and passions.
  • With those savings (it turns out it’s not that hard to lower expenses – who knew?!), we paid off all of our consumer debt (unfortunately, the pesky mortgage remains… for now) – over $30K!
  • I took stock of all the stuff in our house (with 2 adults, 3 young children, and a pet, there is LOTS) and set out to reduce those possessions (I’ve even taken a 12-week online course with minimalism guru Joshua Becker of www.becomingminimalist.com to help with my decluttering efforts!).

Basically, I’ve become more aware and intentional about the money we’re spending, the money we’re saving, the stuff we bring into our house, the stuff we put on and into our bodies, the things we spend our time on, the relationships we maintain, etc.

Most importantly, and perhaps counter-intuitively, spending less money and having less possessions has increased my quality of life significantly.  I am much less distracted by financial concerns and excessive consumerism, and more focused on those things – and people – that are most important to me, like my hubs and 3 kiddos!!

What book have you read that changed your life?

LS