One of the things that Your Money or Your Life advocates is charting your monthly income and expenses.
The idea is to make a note each month of your total income and your total expenses, plot those points on a chart using different colored lines, and post the chart somewhere where you will see it every single day. I have mine posted in our walk-in closet, so I actually see it at least twice a day, and sometimes more. It’s been a great motivator to me. I look at it and visualize expenses going down, income going up. Obviously the idea is to have your income line be greater than your expenses line. When this happens, the space in between the two points represents money for savings or investments.
I do my chart using graph paper & some gel pens, but you could easily create one in Excel or OpenOffice’s Calc if you prefer to do it electronically. Here is a sample chart, using random figures:
One thing that I’ve found beneficial in checking for value is to add up the annual cost of monthly subscriptions. Take Netflix, for example. With tax, we pay $17.28 per month to have both streaming and one DVD out at a time. That doesn’t sound like much at all, but it adds up to $181.44 per year.
If I went out and paid $207.36 for something up front, I would think two or three times before making the decision to buy. I’d think about whether it was worth it to me: Would I actually use the item enough to justify the expense? Is this something that I will enjoy? Is it worth x hours of work to me? Is there something else that I’d rather use the money for? etc.
Now I tend to do this to a certain extent for all purchases, but I suspect that’s kind of unusual. So I think it’s especially important to do for “set it and forget it” type purchases. Is that satellite radio worth it to you? What about your cell phone? Cable TV? etc. Taken by themselves they may not seem like much of an expense, but added up over the year or added together as a group they could make a significant impact.
In our case, we get a lot of enjoyment from Netflix, and it is absolutely worth it to us. In fact that would be one of the last things we’d cut if we needed to make cutbacks. We watch anywhere from 8-15 movies per month, and at $17.28 per month that breaks down to between $2.16 and $1.15 per movie, which is significantly less than we’d spend elsewhere for the same thing. (And even more of a savings from actually going to the movies, which we used to do once or twice a month.) Plus we don’t have to worry about getting the movies back on time, or making trips specifically to return a movie (which I hate doing).
So yes, it is worth it to me. But other things aren’t, and I don’t see the point in paying for them. In fact there are a few things that I wouldn’t want even if they were free. But the point is to take a step back and evaluate your monthly subscriptions periodically. Don’t let your money leak out the door.
I believe that we can learn something from just about any situation. With that in mind, here are some of the things that I learned from early jobs/work I’ve done.
Picking boysenberries. I learned that people will sometimes pay you to do things you love to do. (There’s nothing quite like eating fresh berries right off the bush.)
Babysitting. That I have more patience than I thought. How to start and market a business of my own. That some people value your services more than others, and that you should stand up to the people that don’t pay you what you’re worth or who treat you rudely. (Either by asking for more money, or by refusing to spend your time there.) There are plenty of other people out there that will treat and pay you well.
Dog sitting. That I’m allergic to just about every kind of dog. That dogs love you no matter what. That there are some times when it’s just not appropriate to show or give off the scent of fear. That many people pay more per hour for dog sitters than babysitters.
Worker in a pizza restaurant. I learned that sometimes all you have to do to get a job is walk in and ask. However, sometimes you should fully understand what the pay and work will be like before you accept. To trust my instincts regarding people. I also learned that I don’t get tired of eating pizza.
Bulletin board creator. For this job, I got to design & setup themed bulletin boards in 5 or 6 school classrooms plus an entire library. Once again, I learned that sometimes people will pay you do to the things that you love. (Things that you’d do for free anyway just because you love them so much.) I also learned that there is money in creativity.
Data entry. That if you want a raise, you may need to ask for it. That there is power in numbers. That joking around with and being friendly with the boss is a good thing. That I should pay more attention to my surroundings. That many people learn about and get jobs due to someone they know.
Those were some of the jobs & work I did before age 15. I think probably the biggest things that I learned from working as a kid is that if you want something, you should go after it and do what it takes to make it happen.
What were your early jobs like? What did they teach you about money?
The question for each man to settle is not what he would do if he had means, time, influence and educational advantages; the question is what he will do with the things he has.
– Hamilton Wright Mabie
I think this quote makes an important point. Sometimes we get so caught up in what we’re “going” to do, that we forget to focus on what we’re doing right now.
Sure, things like going back to school, getting a better job, or saving up for a down payment on a house can lead to some major changes in your life, but the present counts too.
It can be easy to think “Oh, I’ll be making more money when I graduate, so it won’t be a problem” when making a financial decision. But basing a decision on how you think the future might play out is often a mistake. After all, what happens if you don’t graduate? What happens if it turns out there’s a glut of people in your field, and salaries are low? What if you end up hating the field?
Thinking too much about what life might be like once certain circumstances have come to pass can also rob you of the opportunities that are happening right now. It’s the things we have and do right this very moment that really make the difference, both short and long-term. See what you can do with what you already have.