Money in your pocket, time on your hands
"People realize they're earning much less
than they thought," says Carolyn Hilles, who gives money management
workshops based on this concept. "When people realize they're
really working for $14 per hour, that $14 bottle of wine looks a
lot different. They say, 'I worked one hour just to pay for this,
and I don't even remember drinking it.'
"I've seen it blow people's minds open. They
didn't understand what they were hiring themselves out for and what
they were spending it on. They have one life on this earth, and
they're blowing it on stuff that doesn't meet their values."
If you run your own business, another way to think
of money is the amount of product or services you'll need to sell
to earn whatever you buy.
"Because I'm a writer, I tend to think of the
spend part of the equation a little differently," says Jennifer
Lawler, author of Dojo
Wisdom: 100 Simple Ways to Become a Stronger, Calmer, More Courageous
"For example, I know how hard it is to sell one
copy of my book to one customer. I make about $1 in royalties from
that sale. So every time I go to spend money, I think of how many
books I have to sell to pay for the expense. This really puts the
reins on things."
For simplicity's sake, let's say that your actual earnings are $10
per hour. That means if you buy a $200 golf club, you're using 20
hours of your life to pay for it. Does this mean that you have to
give up golf, or new shoes, or trips to Cancun? And how do you figure
out which purchases are worth the life energy spent and which are
just a waste of time?
When contemplating a purchase, you should consider
three things, says Wild: personal cost, utility value and social
"Personal cost is the amount of your personal
life energy that went or that will go toward paying for the purchase,"
he explains. "Utility value is the life energy saved or gained
by making the purchase. Social impact is the effect that your purchase
will have on the world and all of its inhabitants."
Only you can decide whether the personal cost, utility
value and social impact of a product or service are in alignment
with your own values. For example, that new rider mower may cost
a bundle, but it's worth it to you because you'll save time over
the old push mower. Or perhaps it's not worth it to you because
the mower negatively impacts the environment.
Still can't decide whether to drop the bucks on the
latest electronic doodad or those sparkly earrings?
"A quick-and-dirty exercise is to ask yourself
what the world would be like if everyone -- including over a billion
Chinese -- followed your actions," says Wild. "Is that
a world you'd want to leave to your children?
"Another exercise is to find someone you really
admire and respect. It doesn't have to be anyone you know personally.
It might be, for example, George Washington or Mother Teresa, or
even a fictional character such as James Kirk or Wonder Woman. Ask
yourself, 'Would he or she make this purchase?'"
If you start living by this concept, you're
sure to start spending less. The result? More money in your pocket,
and more time on your hands.