Choosing a priority: debt free or thinner?

This weekend I have spent a bit of time reworking my spending and savings plans to try to absorb some extra costs for dieting and exercise. I’m paying a monthly fee for Weight Watchers which I had not expected when I set my budget and I would also like to start Pilates or some similar exercise class. My problem is that when I realised the exercise class was another unexpected expense I was very reluctant to take it up.

My budget was worked out so that I could pay out all my debt by the end of this October as that was my highest priority. Although these extra costs are not large, I also have some expensive dental work this week which will deplete my savings a little and my 17 year old car is making some very alarming noises whenever I turn left. Consequently I am very reluctant to do anything that jeopardises the remainder of my small emergency savings. I guess I must really have learnt to control my spending if I am reluctant to commit to and extra $25 a week for diet and exercise help! The old me would have just pulled out a credit card without thinking but the new me has more self control (and also no credit cards). I know if I want to do this I have to rework my spending priorities but I am having real trouble finding this money from anywhere but my debt snowball or savings.

I’m in a bit of a quandary now and don’t know if I should rework my debt payout plan yet again and accept a longer time before I am debt free or try to exercise without any classes to keep me on track for late October. I really don’t know what to do so I’m going to procrastinate for a few days. Maybe I will feel better about the exercise class on payday when my bank account looks remarkably full…

Two down, one to go…

A completely unrelated photo of a lovely old patchwork rug at Runnymede in Tasmania.

Yesterday I made a lump sum payment on my second last remaining consumer debt to pay it out completely. Now I just have the last, and largest, debt to go! I will probably have to break into my savings for food next week as I used all but $50 in my cheque account to clear that debt, and one cannot live on hot cross buns and easter eggs for ever! At least I know that if I do need to access my savings next week I can replenish them the following week from my next pay. It was a fantastic feeling to pay that debt out, especially as I had only had the debt since just before Christmas last year when I had my first and biggest slip-up on the road to financial security.

I have been using a modified debt snowball method to get rid of my debts (including the holiday for Mum), starting with the smallest and working up. What I am going to do now is pay $450 or more every week off the remaining personal loan with the goal being freedom from debt by the end of October. This is a very achievable goal, even if there are small emergencies along the way, so it is entirely possible that I could pay it out by the end of September. My plan (aka budget) includes adding to my savings as I go so if I see a cheap airfare for somewhere I want to go I will be able to get that as well!

When I finish paying out this last debt it will be the first time in my entire adult life that I have been debt free. Almost thirty years of debt. Almost all behind me! Although I have some long term plans for large investments what I plan to do first of all is reward myself by taking the overseas holiday I have been dreaming about for decades. I’m a big history buff and keen follower of Time Team and similar BBC history shows and what I have wanted to do for ages is to take a holiday in the UK so I can see some of the historical sights in person.

I’ve been so excited by my progress at saving money, cutting costs and achieving my goals that I have been tentatively costing out a week in London for Christmas this year. I don’t know if I could really do that as I absolutely will not pay anything toward the holiday until the last of my debt is gone and by October or November the prices for flights and accommodation may be too high for me. The habit of frugal living makes it almost impossible to contemplate paying to stay at a four star hotel in London at $400 a night! There are cheaper options on airbnb.com but they will just have to wait until I get over this one last hurdle…

Back on track and moving fast…

It has been a hectic few weeks since I got back from my holiday and I feel like I’ve spent them moving at breakneck pace until today. The lease on the unit I had been renting was due to expire on March 30th and I really wanted to move, for a whole lot of different reasons. In the two days after I got back from my holiday I had two open house events at my own unit and went out to look at a few others that were smaller, cheaper and in nicer locations. Luckily I found exactly what I was looking for and was able to sign a lease and move within a week! It was a whirlwind of packing, moving and unpacking and my expenses register for March looks horrendous with expenses almost twice my monthly income, thanks to the holiday and moving costs.

I’ve downsized from a two bedroom, two bathroom townhouse with air-con, dishwasher and remote internal garage to an tiny, old, wooden one bedroom flat with a shared laundry and garage. This might sound bad at first until you hear that I have nice, quite (non-student) neighbours and a shopping centre, parks and doctors within easy (and flat) walking distance. I’m also saving the not inconsiderable sum of $125 a week on rent (or $6500 a year!!)  plus hundreds of dollars a year on garden maintenance and utilities. And I am pretty confident that the nice people I now rent from are not going to be anywhere near as difficult as the last real estate.

Initially I started thinking about moving because I have been tracking my expenses and discovered that I spent more on rent than on anything else. In fact I live quite cheaply as I am trying to become debt free so I was shocked to see that the rent was 42% of my actual outgoings every month! The unit I was renting was nowhere near important enough in my life for it to take up so much of my weekly expenses, especially as I didn’t own it and couldn’t even hang my own pictures in it. What I really want to spend my money on is travel, so now that I have moved I intend to put the money I am saving on rent away in a special savings account. That $125 a week is going to pay for a very nice holiday for me at Christmas!

Needless to say the moving costs have wrecked my budget and savings, but I am not going to be thrown off by one little setback when I have been doing so well all year. I have written up my budget for April and am still planning to payout one of my debts this month and then snowball into the last debt of all. Even with the extra savings I am putting aside separately I am pretty sure I will be debt free by the end of this year, although possibly not as early as I had planned in September. This month I am also investigating ways to cut my weekly food expenses and stop wasting food. Every little bit of money I save will help my budget and every little improvement to my diet will help me lose weight and regain fitness.

After the excitement of my holiday in Tasmania I was out of the habit of walking daily and really noticed a change in my mood, and not a change for the better either. I also noticed to my amazement that all my clothes seemed to have shrunk slightly while I was away! Must be my washing machine, it also had trouble getting the stains out where I dropped one of the Pralines d’Anvers I’ve been eating in bed. You can’t trust some modern technology, my digital bathroom scales aren’t working properly either.

Anyway, I haven’t budgeted for new clothes this month so I’m off tomorrow to explore the walking tracks near my new flat. It would be good to shrink me instead of my clothes this month :-) Hopefully I’ll re-establish my good habits quickly and by the end of the month I will pass another big milestone on my road to a debt free, healthy life.

Here I sit, in a steaming pile of collapsed plans…

Tasman Bridge taken from the Cenotaph

I’m back from taking Mum on the holiday to Tasmania (photos inserted) and contemplating the overspending and overeating which have resulted in the utter destruction of all my plans. I have no idea how much I spent (I gave up trying to record my expenses and it will take me a few more hours to work it out) but I know it was far more than I expected. It seems I spent it all on expensive and fattening food too as I appear to have regained a lot of the weight I lost in January and February. I did bring home some smallish bottles of nice whiskey (still unopened) but souvenirs from the visits to the cheese and chocolate factories, berry farms and bakeries are now only visible on my thighs (and backside, and belly and …).

Well, time to regroup, work out what went wrong and how to avoid it in future and then make fresh plans. Also this is the last weekday of my holidays and I need to find somewhere else to live as I have to move next weekend. Plus there is very little food in the house and not much money left in the bank.

Firstly, I was not in control of this holiday, Mum was, and her expectations were far different from mine. She wanted to drive around and see as much as possible and did not want to stay in one place or even make firm plans. This meant that we went down there with only half of our accommodation booked and I had to spend quite a bit of time and money looking for suitable accommodation. In the end I had to pay almost $600 for two nights accommodation over 200 kms from where we wanted to be. Even worse, it turned out to be a very ordinary country motel of about three stars. The lesson from this is that if I don’t take control of my holiday (and money) someone else will and I won’t like the outcome!

Inside King Solomon Cave near Mole Creek in the Tamar Region

Secondly, I had not planned well for activities Mum would be interested in doing. We could have saved money and had a more enjoyable time if I had sneakily planned ahead and known where and when tours and events were on that Mum would like and was fit enough to do. This would also have assisted with accommodation and dining choices as Mum is far more choosy and less adventurous than I am with food. This holiday gave me a good example of where apps like Urbanspoon and TripAdvisor are of little to no use as they recommended only places I would like and did not have many entries for the sort of old-style restaurants Mum would like. If I had thought about it beforehand I would have realised that my favourite apps that rely on crowd sourced data might not be so reliable in places where there are not crowds of smartphone owners like me! The lesson to learn from this is that planning ahead is much cheaper and more reliable than relying on apps, especially if you are doing things you would not normally do.

Thirdly, I did not stick to my habits of expense tracking, using the cash envelopes and daily exercise while I was on holiday. Part of the problem was that I had no time to myself, was quite rushed and had a lot of responsibilities. I did not want to make Mum sit and wait while I entered all my purchases and also did not want to leave her on her own while I went to take a long walk. She is convinced that everything and everyone is dangerous and any small patch of scrub is teeming with deadly and ferocious creatures desperate to get their teeth into me! Without a supportive environment with enough time and control to take my daily walk or enter my expenses or even to go to the ATM and withdraw my cash on payday all my newly built habits were confounded and I ended up sliding back into my old default behaviour. The lesson to learn from this is that my habits are completely dependent on my personal, social and structural supports. Next holiday I need to plan in advance so I can build structures to support my new habits while I travel.

The old bridge at Ross, a beautiful place to stay!

My next holiday will be quite different to this! Once I have paid off my debts this year (which I think may still be possible) I will be saving for a month in Europe. This time I will be going alone and planning accordingly so I don’t overspend and don’t waste time trying to book things at the last minute.

Bad habit to break – spending without thinking

Wow, I totally blew my budget and diet last week on my trip to Melbourne. This does not bode well for my upcoming holiday in Tasmania, where I had planned to visit a whiskey distillery or two four. It has taken me about an hour to sort out my receipts and balance my accounts as I really did not keep track of how much I was spending or what I was buying. Apparently it is incredibly easy to spend as much on chocolates in a ten minute stop at Haigh’s as you can spend on excellent tapas and drinks for two hours at Hairy Little Sister. Who knew chocolate could be so expensive?

I did buy some of the chocolate as gifts but not all of it and what I did get has not lasted long. This really brought home to me how much I used to spend without thinking before I started my budgeting. My trip has depleted my savings by $200 more than I planned and most of that money will have to come out of my “Shameless Extravagance” fund for the next month. That means no more iTunes credit or DVD box sets from JB HiFi till I get back on track :-(

The good news is that I actually do know how much I spent on chocolates and other things in Melbourne. Just a few months ago I would have spent even more on my trip and had no idea how much money I had spent on anything. The budget has at least helped me put some boundaries around what I feel is an acceptable amount to spend on different things and given me the ability to judge when I have spent more or less than I want to.

Spending without thinking used to be the norm with me as it probably is for many people. It is one of the bad habits I am trying to break now and replace with good money habits like tracking expenses, budgeting and planning for my purchases and financial goals. I have been fairly successful at stopping myself from spending without thinking to date but clearly being away at a conference, and in close proximity to a high concentration of chocolate shops, is one of the times when I am in danger of slipping back into my old bad money habits. If I had so much trouble in Melbourne where I was very busy at a conference then I will probably also have trouble when I am on holidays in Tasmania. I will work out some strategies to keep me on track before I leave, just in case.

Apart from the budget I have also really found it helpful to have worked out what my real hourly wage is so that I can stop and think before buying something and ask myself if it is worth that many hours of work. Whenever I see something worth $20 or more I now think “that is one hour of work, is it worth it?”. This really changes my shopping: I’m no longer comparing prices, I’m now comparing value and that helps me stop and think whenever I am tempted to spend money on unplanned purchases. Once I worked out my financial goals I made sure I put a list of them into Evernote and made it my default folder. As I have Evernote on all my mobile devices any time I am really tempted to spend money over my budget limit I can look first at my list of financial priorities and compare the value of  each of them to the value of the thing I am tempted to buy. Stops me dead in my wasteful little tracks every time! Well, except when I get to Haigh’s. Apparently nothing stops me there :-)

New habit to learn – saving money

English: ceramic piggy bank

Image via Wikipedia

As I’ve mentioned in previous posts I’ve never really sustained a savings account at any time in my adult life. I now think that I had three major problems with money that led to my lack of savings:

  • My attitude to credit cards, which I treated as my emergency fund;
  • A lack of clear financial goals, wich meant I only saved for short term goals; and
  • A failure to prioritise saving ahead of spending, which meant I only put savings aside after I had paid my living expenses.

Over the years I have paid out thousands of dollars interest to credit providers because I lacked savings I could use for both genuine emergencies and larger planned purchases. I’ve also paid tens of thousands of dollars in rent over the last thirty years. But my lack of savings not only cost me more it also prevented me from living as I really wanted to. Despite years of daydreaming and vague plans I never did get to take an overseas holiday or buy myself a campervan for weekends away.

Thanks to my recent reading I have changed my attitude to money now and am making saving money a new habit and a financial priority. Each payday I logon to my bank and transfer money into my savings account before I pay any of my bills or withdraw cash for living expenses. I have a list of short term and long term savings goals and I’ve started tracking my progress toward these in an online spreadsheet. This makes it easy for me to know how much I need to save each payday and helps me recalculate easily if I have unexpected expenses or my goals change.

It has been much easier to do this since I changed to St. George Bank and started a Sense everyday account and a savings account that work together. The savings account is only accessible online so I can’t be tempted to use my savings for an impulse purchase as I need to transfer savings back into my everyday account to use the money. There is a fantastic little extra savings trick to this account too. Whenever I use my Visa Debit card to buy something with my everyday account the amount is rounded up to the nearest dollar and the extra cents are transferred to my savings account.

I can see my savings increasing each week, which is incredibly encouraging, and I’ve already been able to use my savings for quite a few unexpected expenses as well as for prepaying flights and accommodation for an upcoming holiday. So far my balance is relatively small as I am still focussing most of my available discretionary funds to paying off my consumer debt but I expect to have my debt paid out entirely by September and then I will be able to allocate all my discretionary funds to my savings goals.

If all goes to plan I will be able to take my overseas holiday next year, buy a home for myself within ten years with little or no mortgage and retire on a relatively comfortable income in about fourteen years. Of course this plan requires me to continue to earn as much as I do now and to allocate about 40% of my income to savings as well as 9% (pre-tax) to my superannuation. It also relies on me continuing to work for an employer who pays over 14% into my super. Saving up to 50% of my income each and every pay is going to be fairly challenging to say the least. I also like to change jobs every three or four years so it may be difficult to maintain this level of contribution to my super.

At least I have some plans now, even if they are going to be challenging to meet. But I can see myself meeting them simply by making my savings a higher priority than spending money buying new gadgets or eating takeaway every night. It has been incredibly satisfying being able to meet unexpected expenses from my own cash savings rather than using credit. There is far less stress and no ongoing commitment to paying off a debt. No wonder so many other people are so keen on saving their money, it makes for such a calm, stress-free life!

I’m twice the woman I ought to be

If my bathroom scales were showing pounds instead of kilos I’d be fine. They’re not. I’m not fine, I’m at least 45 kilos overweight and have been for nearly ten years. This has really started to worry me lately though, as I have gradually lost my fitness through being too overweight to walk, cycle and swim like I used to. I walk into work most days and get out of breath only a few metres into the hill climb. I’ve also had chronic problems with both my ankles of late and I know this is mostly caused by the strain they are under propping up way too much of me.

I’d really like to regain my fitness and walk up that hill without puffing and sweating for half an hour afterwards. In fact that is another of my goals for this year: to increase my fitness so that, by the end of this year, I can walk up the hill to work at a normal pace and not get badly out of breath. And I’m going to do this by budgeting. I know a typical weight loss/fitness goal is achieved by dieting and exercise but I have worked out that my problem is not my diet and exercise. The poor diet and lack of exercise are the symptoms of my problem and my real, underlying problem is over-consumption. The poor diet is enabled by not controlling my money and the lack of exercise is a side-effect of too much internet, movie and book time and not enough nature time.

I always buy good quality, healthy food in my weekly grocery shopping but later in the week, when I get home from work late and tired and I don’t feel like cooking, I go out to the takeaway shop and buy something unhealthy to eat. I end up having a high intake of calories, fat and sugar and throwing away really healthy ingredients because they have gone off after languishing ignored and unloved in the crisper of my fridge for far too long. When I was a single parent and quite poor I had to eat healthy food I prepared at home as I could only afford takeaway meals once every month or two. Now that my income is so much higher I no longer have external restrictions on what I can buy and I have gradually fallen into the habit of spending money on food unthinkingly and uncontrollably.

Likewise, I don’t restrict the amount of time I spend on the net, reading or watching movies. I will usually start reading news feeds and social feeds shortly after I wake up and usually spend hours every day with a screen in front of me passively consuming content rather than having a life. I haven’t owned a television set for years and have always thought that people who organised their routines around the broadcast of their favourite series were mindless slaves of the broadcast network but when I consider my own internet habits I can’t see much difference except that I am enslaved to a few apps and websites.

Both these bad effects of over-consumption create a vicious cycle and breaking this is going to be a challenge. I am looking to my budget to help by forcing me to menu plan, buy only what I need, prepare it at home and resist the temptations of the takeaways shops. If I only go to the supermarket once a week I will spend less than if I shop every day. If I go with a list and stick to it I will not buy too much. If I pay all my spare money off my debts and restrict my food spending to a sensible amount I will not be able to afford unhealthy food choices. It is proving a bit challenging re-learning my old recipes and limiting what I buy, when and how often I shop.

It is proving easy to relearn my old habits of regular exercise. I have always been quite active and used to love my daily cycle to and from work along the Upfield Bike Path. I always found it improved my mood to be outside in the fresh air, even if it was walking home listening to my lectures on my iPod. This month I have been walking five days a week or more for between 40 and 50 minutes around Herston and along the Enoggera Creek Bikepath. The photo at the top of my blog is a shot from my phone of part of this beautiful pathway. Once I got started exercising at a regular time again I quickly became addicted and have really missed it when the weather has prevented me from walking. The regular hour a day of time after work away from all distractions has stopped me from brooding about things that get on my nerves at work and helped to improve my mood enormously.

Japanese Garden at Mt Coot-tha Botanic Gardens

Today the creek path was in danger of flooding so I went for a short stroll in the Mt Coot-tha Botanic Gardens instead. The Japanese garden looked beautiful and I was the only one out there in the rain.

I have a wall chart up in my bedroom where I record my weight every morning and the exercise I have done every evening. In the first 28 days of this year I have lost 2.1 kilos and exercised on 22 days. So far the plan is working, hopefully I can keep this up and at the end of the year I will be a shadow of my former self.

A budget is a plan not a life sentence

When I was trying to work out a budget I initially made quite a few mistakes that helped me learn quite a bit about my attitude to money. Firstly I restricted myself far too harshly in the misguided belief that a budget was about not spending any money at all on non-essential items. Most people think of going on a budget as depriving yourself just like being on a diet that outlaws chocolate makes you feel deprived, even if you didn’t eat chocolate before you started the diet.

I made this mistake at first and kept trying to make a budget that had no room for any kind of extravagance. No takeaways, movies or books this pay, Carol is on a budget! Well those budgets last about as long as a snowflake in Queensland. Take my advice and don’t even try it. Restricting how many movies/books/games you buy a month is ok, but cutting out all extravagance entirely is only for truly desperate straits, not for a normal budget. In fact I think it is just as bad as those fad diets that tell you to live on only rockmelon for a week. If you can’t live on the budget forever it is just a fad like the rockmelon diet and you are doomed to breaking it eventually just in order to survive.

So my budget now has categories for entertainment, takeaways and one special fund which I have labelled “Shameless Extravagance”. The amounts I have budgeted in these categories are actually way less than I used to spend on these things, but by using real cash for them I really notice, and appreciate, when I have spent $20 on shameless extravagance. It is really amazing how much more emotionally satisfying it is to use real cash for these things. I find that I don’t feel deprived because I can see the cash, separated out in its own envelope and clearly marked as just for takeaways or whatever. Then when I hand over real cash the things I am buying seem more permanent somehow and I find I remember spending the money more than I would if I had used a credit card and usually enjoy the thing more or for longer.

Another of the mistakes I made with my budget initially was to think it was fixed in stone and couldn’t be changed as I went along. This is utterly unrealistic. Accidents and unexpected expenses happen all the time and you have to have enough flexibility to change your budget as you go along to cope with these things. For example this month I have had an unexpected baby present to buy and a phone bill that was $60 higher than I expected. I have reallocated funds from a few of my other budget categories to cover these expenses and have also been prompted to review my phone and internet contracts to see if I can get a better deal. It was initially difficult when these expenses came up because I am used to thinking of changing a budget as some kind of failure, as though I have to get it perfectly right the first time. No one is perfect of course and no budget can be perfect either because no budget can take every conceivable contingency into account.

The process of budgeting is not about setting up an inflexible plan, rather it is about identifying your priorities for your money and making sure you allocate your available funds to your highest priorities. Since your priorities change throughout the year and you have both short term and long term priorities this means that each week or month your priorities will be slightly different and you may be allocating more or less than you initially expect to particular funds. Once I had worked out that reallocating funds to cover unexpected expenses was a normal budget activity that I was supposed to do and not some massive failure on my part I actually started to enjoy the budgeting process far more and to think about my budget tools more critically.

I’ve tried a few different tools to calculate my budget now but have settled on a Google Docs spreadsheet by Cory Hopper which is based on Dave Ramsey‘s approach. This lets me easily edit my categories as I go through the month but the best thing about it is the automated reports for my envelopes of cash and tracking my multiple little savings goals as I go along. I really like being able to see my progress toward all my little savings goals and be able to see the effects on my savings immediately if I have unexpected expenses that impact on my budget. I’m enjoying the process of budgeting my money and knowing where it is all going at last. But best of all I’m enjoying watching some of it stay right here with me!

New Habit to learn – expense tracking

After I realised I had nothing much to show for over a million dollars of lifetime earnings I decided to take the advice of all the personal finance gurus and track all my spending. (Plus this was a good excuse to get a new app for my iPad.) I was especially keen to work out why my debt level always seemed to be the same no matter how much I earned.

I tried out a few different apps on my iPad and finally settled on Home Budget ($5.49 for the full app) as it let me budget as well as tracking my expenses. It is a fairly full featured app actually, you can even enter all your bills as they come in and it shows you reminders to pay them. It also allows you to track payees for your expenses which was quite illuminating to me. It turns out that a large proportion of my money (ten to twenty percent) was going to family for gifts, loans and emergencies and needless to say little to none of it was coming back. Clearly I need to toughen up and be more selfish or I’ll have to go live with my daughter even before I retire!

Every time I have paid a bill or bought anything at all I entered the details into my app. At the end of the month I had some figures for how much I had spent on each of my budget categories. This was incredibly helpful for my budgeting. I’m not really very accurate in my estimates of how much I need for particular things (like utility bills or petrol) so this gave me a base and something to measure my goals against.

I am now trying to cut down my spending in particular categories and can measure my progress by comparing this month to last month and to last August (my baseline month). In fact by expense tracking this way I have turned my budget into a game of sorts and I have a small amount of cash I set aside each pay as a reward for under spending on any of my discretionary budget categories. If I am underspent I can spend my cash reward on anything I like (generally this means chocolate) but if I am not underspent then I have to use it for bills or the overspent categories.

At first it was difficult to remember to put all my expenses down but after a few weeks I got into a routine of doing this each afternoon when I came home. It’s been much easier lately as I have switched over to envelope budgeting and using cash for my daily expenses. This has probably had the biggest impact of all on my money awareness. It is amazing how much closer you watch your cash when it is a finite sum, especially if you have deliberately reduced the amount by ten percent of what you previously spent. I no longer go to the supermarket daily, now I try to go once a week, or twice at most, and shop with a list I stick to exactly. No more impulse purchases of chips or cheesecake even if they are on special!

 

How Carol learned to value her money

For years I lived on a very restricted income as a sole parent, especially when I put my self through uni. I remember having the weirdest things for dinner in the last few days before a pension check arrived, like sardines on celery (don’t try this, I don’t recommend it). But unfortunately when I started earning more money I started buying better, or more expensive, food and I also started making complicated recipes that usually meant I would throw out leftover or spoiled food every day. My eating and shopping habits gradually changed as my income gradually increased and I just didn’t notice it.

After thinking about my financial situation, my weight and fitness and all the other parts of my life I am not happy with I have come to the conclusion that most of these issues are caused by over-consumption. Although I have always tried to do “green” things like not owning a car, minimising the plastic in my house and recycling I had not ever really examined what I spend my money on and thought about what value I am getting from that.

Over the Christmas break I listened to an audio book version of “Your Money or Your Life” by Vicki Robin and had a little light bulb moment. Taking Vicki’s advice I calculated how much I had earned in my life and was amazed to realise this was just over one million dollars! Admittedly these are Australian dollars which have until recently been the milk-bottle caps of the world economy, but still, $1,000,000!!! What the heck do I have to show for that? Less than $200k in my super and all seven seasons of Buffy boxed DVD sets. No house, no fancy car, no fabulous overseas holidays. I have wasted a lot of that money, and most of it on things which had no enduring value to me or my daughter.

After doing this little exercise I continued on with Vicki’s advice to calculate my actual hourly wage. I am in a well paying job now and my payslip says I earn over $50 an hour for a 36.25 hour week but when you factor in unpaid overtime, work clothes, lunches with colleagues, professional association fees, self education (including all the time spent reading blogs and tweets) and taxes it turns out that I only earn just over $20 an hour for every hour I spend earning my salary. Think about how many hours it takes me to earn the rent money for this nice apartment ($400 a week or 20 hours) or even how long I have to work to buy a hard back book ($50 or 2.5 hours).

So from now on I am going to question the worth of everything I pay out my money for and ask myself “how many hours of my time will have to go into paying for this?” and more importantly “is this thing really worth so much of my life energy?”. This should help me to work out what is really important to me and what things will move me toward my real goals, instead of just keeping me current with the Joneses or satisfying a vague urge brought on by clever marketing and lack of self awareness.