In the post-1 of Your Money or Your Life book review, we saw about the
fulfillment curve that is emphasized again and again in the book . “How much money is enough? “ to lead a life of Living is indeed a
very tough question …Is it not? What is enough for one individual may not be
enough for another …To help answer this question of fulfillment, Vicki Robin provides
an interesting analogy between personal finance and dieting.
For the starters, Diet simply is not the solution for weight
loss… what !!! If Diet is not the cure , then what is ?...Being conscious of
what you eat is the cure…so instead of dieting , the experts recommend the
following:
1)
Eat when you’re hungry
2)
Eat exactly what your body wants
3)
Eat each bit consciously
4)
Stop when your body has had enough
Sounds Simple…is it not? It is all about being conscious and
mindful !
Looking at the dieting
analogy and applying it for personal finance , the equivalent steps can
be:
1)
Spend to satisfy you needs
2)
Okay..Okay…And then you are allowed some luxury
in your life…spend a bit on your wants
3)
Spend each rupee/dollar/pound consciously…(remember
Life Energy = how much hours of your life you have traded for to buy this item)
4)
Spend only “Enough”
a.
Did I receive fulfillment, satisfaction and
value in proportion to the life energy spent?
b.
Is this expenditure of life energy in alignment
with my values and life purpose?
c.
How might this expenditure change if I didn’t
have to work for a living?
In
the Post-2 we saw the tool to track every
expense that looked something like this :
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Total Rupees/Dollars
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Hours of Life energy
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Rent
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Electricity
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Groceries
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Eating out
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Fuel
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Vehicle expenses
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*Hour
of Life energy = Expense in Rupees or Dollars
Actual Hourly rate (Rupees or Dollars)
This should be a pretty simple exercise , as long as you
have recorded the daily expenses….
Now comes the clincher of the book…answering “how much is
enough?” … 3 columns have been added to the above table, namely,
Fulfillment-Alignment & After Financial Independence (no need to work for a
living !!!) …In these last three columns , put a ‘O ‘for being neutral in each
cell against each expense , put a ‘+’ if expense provides
alignment/fulfillment, put a ‘-‘ if the expense is a bit of a pull-down on you.
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Total Rupees/Dollars
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Hours of Life energy
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Fulfillment
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Alignment
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After FI : ( If I don’t work for a living, How will this
expense change)
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Rent
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Electricity
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Groceries
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Eating out
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Fuel
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Vehicle expenses
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The above monthly with
information recorded now is not a mere financial statement … it is more of an
awareness tool . The point is then to realize your where “-“s are, and how to adjust your spending until you have Os
and +s in all your columns…Remember the diet analogy…being conscious is what
helps the body weight loss … not the dieting. Above chart provides you that
consciousness on personal finance…
In the next post, we will see further tools to track the progress you would make with the YMYL approach…