Money Books: YMOYL vs. All The Money In The World

There is no real “battle” between the much-acclaimed “Your Money or Your Life (YMoYL)” and the recently published ”All The Money In The World (ATM)”.  In fact, they probably spring from the much of the same philosophy and focus on our relationship with money.  However, I think reading these back-to-back inspired me in completely different ways.

First some background…My natural frugal tendencies is often in conflict with some entreprenuerial impulses.  In general, frugality wins.  It’s not to say I  haven’t ventured out into more entreprenuerial territory but it’s definitely outside my comfort zone.   I have enough on my plate with my full-time job, commute, family, and other priorities in life.  Excuses aside, I sometimes wish I devoted more energy and money to earning more instead of just saving money via sales, negotiating and couponing.

“Your Money or Your Life” resonated with me because it largely supports an ‘alternative’ view of living, one  that is miles away from the rat race.  After finishing this book, I felt strongly that we should move to Italy with our kids.  I am ready for the next phase of my life, whatever that may be.  My husband is tired of life in the U.S. and we have always wanted to raise our kids in Europe, with Italy being the logical location.  While there are many cons, from economic woes to healthcare crisis, we felt that our kids would benefit from Italian culture and heritage.  

“All the Money in the World” appealed to my long dormant entrepreneurial side.   It made me question my choices and wonder if I should have been or become more focus on earning more, even if that means staying in the rat race.  That’s not to say ATM is the opposite of YMoYL.  In fact, ATM’s author is very entrepreneurial and has found her dream career, one that is lucrative enough and flexible for her and her family.  Much like YMoYL, she asks us to re-examine our choices in spending and questions whether our spending is aligned with our values.   The difference, is in the details.  While she cites examples from readers and other sources, I was most struck by examples from her own life.  In the chapter “Ode to a Ziploc bag”, she talks about our tendency to spend more as we get used to higher standards of living.  In one example, she recounts splurging on a $21.99 toy train for her son.  He has more than enough trains just as so many of us have enough shoes, clothes, electronics and other “toys”.   At what point is it enough?  However, what struck me more most about this example was that she could afford to spend that amount.  I want to spend on my kids without worry.  Would we be able to do that if we move to Italy and essentially start over?

My conflicting responses to these two books is probably more indicative of my state of mind than the intended messages.  I think both books have value and will make you examine your own money beliefs.

Wait, I Do Have Dreams…

When I was reading Chapter 4 of Your Money Or Your Life, I could not come up with good answers related to questions about goals/dreams.  What kind of life did I imagine for myself and my family?  What did I still want to achieve? I had no answers.  Although it was a sad realization, I didn’t really think much more about it until recently.

At a certain age, you know that you won’t achieve “bigger” goals and dreams.  Hell, there’s a high probability that you won’t achieve any big dreams!  To be fair, dreams also change once you reach the real world.  For a while I thought I wanted to work in the movie business but once I found out more about it, I  knew it wasn’t for me.  While I’ve come to terms with abandoning certain dreams, I couldn’t go forward in life without any hopes and dreams.   That’s when I realized that two of my biggest goals/dreams are still within reach and that I already talked about one of these on this very blog.

Here are the Big Two:

Moving Abroad:  I’ve dreamed of moving abroad since my college days.   I don’t remember if I pinpointed a location but Europe was definitely the target. I blame Hemingway or Scott Fitzgerald for this obsession.  Of course now that I’m older, wiser and with a family, I know that the unencumbered starving artist lifestyle is not at all glamorous and not for me at all.  I’ve seen the struggles of immigrants (I won’t glamorize the move by using the term ”expat”…) and it’s tough to transplant yourself to another culture, no matter how much you think you’ll love it. 

Speaking Italian (or a romance language) like a native:  I read a very helpful magazine article about how to define your 5 year plan.  A five-year plan is a daunting prospect for  most, so rather than just asking yourself the question and drawing a blank, the article writer took you through steps to get there, starting with listing five past achievements that make you most proud and why.  I came up with more than five but noticed one common thread: I was most proud of challenging projects especially if it involved overcoming fears.  Learning new languages has always been a challenge for me.  While this is a newer life goal, I would love to be as fluent as possible in Italian and I know that I would be very proud of this achievement. 

Now that we’re contemplating a move to Italy, those dreams could become reality (although not without hard work).  So in a nutshell: Two of my biggest dreams are also two of my biggest fears. 

Do you have a five-year plan? 

Financial Independence And Co-Dependence

As I get close to the end of ”Your Money or Your Life”, I alternate between feelings of inspiration and depression, for lack of a better adjective.  Chapter 8 of YMOYL focuses on the cross-over point, when you reach financial independence and reap the rewards.  There are many success stories which are inspiring. Some people quit their jobs to volunteer, spend time with family and friends, and/or travel.  Those are the kinds of stories that I expected to read.  However, many people take a sabbatical and then go back to work.  The point is that choosing to work is very different than having to work. 

At the same time, I get somewhat depressed, or deflated, when I think of taking that next step and the consequences.  The big “What ifs” pop in my head.  I’m ready to move on to the next phase of my life but I can’t imagine feeling so free mentally in regards to finances.  I am used to a steady paycheck with paid vacations;  I imagine that financial worries would seep into my muddled head.  We’ll see how this plays out….

Financial independence is harder to achieve when your spouse is not onboard.  My husband is just not interested in reading or discussing finances.  I have told him about my readings but I doubt he’ll ever read the book himself. 

Like it or not, our financial lives are intertwined.  I don’t believe in separate finances, other than some fun spend money, because it all comes out of the same pot in the end.  When we don’t jointly focus on our household spending now, we both end up spending more.  Luckily he has adjusted to my frugal tendencies over the years even though he thinks I’m a bit obsessed.  Our backgrounds are so different that it’s hard for him to imagine a life where you can’t fall back on your parents as a last resort.  Even when he worries about money, I feel that he believes things will work out.  I don’t think like that.  I imagine worse-case scenarios.

I guess I really need to pay attention to Chapter 9, which talks about managing your finances.  I also lined up another finance/lifestyle book for reinforcement and ideas. Next up: All The Money In The World.. I really hope that I can reach a place where I view money as a tool and not be so paranoid.

Have you crossed over to true financial independence? If so, what’s your story?

Inspired by Your Money Or Your Life

I’m reading Chapter 6  of Your Money or Your Life entitled “American Dream on a Shoe String” and I have to say it’s been the most inspiring section for me, so far.  I’ve read a lot about similar topics but it’s nice to see it laid out in one chapter and focusing on the big picture rather than giving tips.  Tips are useful but the author’s point is that this type of information can get very outdated quickly, and you can find tons of good tips on frugality blogs.

I got a lot out of this chapter although for very different reasons.  One reinforce what I’ve known for a long time and the other was a new way of looking at things:

What I’ve known forever is Stop Trying To Impress People.  I’ve written before about keeping up with the Joneses, or the mythic rich couple next door, and it’s a losing battle.  As the writer notes, “If you stop trying to impress other people you will save thousands, perhaps millions, of dollar.”  It’s not just about money and conspicuous consumption.  That’s because the desire to impress can affect all areas of your life from big purchases to career choices.  Unless you dig deep, you may never do anything that really brings you true satisfaction.

The more eye-opening statement for me was Meet Your Needs Differently.  This means that instead of relying on retail therapy or exotic vacations, you find affordable substitutions to satisfy your needs.  For example, a big trip abroad may mean different things for different people.  Maybe you want to a break from routine or want some downtime. Maybe you really like to try new things.  Once you figure out your real need, you can find a frugal substitute that can satisfy that same need.  You can get that break just by staying home from work. You can get downtime by hiring people to clean house and and do your chores for one day.   If you crave something new, you can take a foreign language course online or try out an exotic cuisine.  That’s not to say you should never take that big trip but just make sure you can afford it!

Two of my favorite indulgences are spa days (massages, facials) and traveling.  Both things are not very do-able for me at this time.  However, if I analyze why I love these things, I can probably find frugal substitutes.   For example, if I go to yoga, I get time for my self and relaxation, which are two of reasons I love spa days.  I may have to get better about mimicking the pampering aspects of a spa.  Some things that I can do is take a long bath with lavendar oil,  do a steam/facial at home, buy flowers, drink water with lemonade and play calming music.  

As for traveling, my favorite parts are meeting new people and trying new cuisines, both of which is very do-able in multi-cultural Los Angeles.  I like the feeling of seeing new things and it may be time to explore new neighborhoods.

As I progress with the book, I feel myself more reluctant to spend.  At the same time, I have been rationalizing the purchase of pricier skin products because those are important to me.  My husband made two lunch dates and the old me would have been a bit upset at the increased dining out expenses in the same week (and I had made separate plans too!); however, socializing with friends is a priority for us and I won’t sweat it.

On the other hand, I have been spending way too much on eating out at work. I’m going to make an effort to make simple sandwiches.  One favorite that is easy to make is toasted wheat bagel with sliced tomatoes, arugula and tuna in oil, plus a little mayo (avocado optional).  I just have to watch out for food waste, which negates all my money-saving efforts!

Update: I took a peek at the Madewell website.  I am so tempted…so many cute dresses, sweaters and tops on sale!  I don’t need anything but I do want a summery canvas bag, which of course is not on sale.  Help!

Old Happy Purchases

A lot of popular blogs and magazines  frequently feature things to buy. Spring is in the air! Time for new stuff in the latest colors! Everything you bought in previous seasons is out-dated!  I admit that I’ve been tempted so many times and if you are, too, you might need to do this little exercise, too.

Go through your house or closet and remind yourself of past purchases that still make you happy. You might be surprised that many things you thought of as “investment” pieces did not bring about as much happiness or return-on-investment as expected.  You might also get a small dose of happiness from old purchases and not feel the need to buy new things.  At least that’s what I was hoping when I wrote this post (inspired by my new spending mentality due to “Your Money or Your Life” Regular readers will be tired of my constant reference to this book by now).

So here goes my list of old purchases that still make me happy:

1. Peacoat: A classic in blue that I got a good deal on
2. Leather boots from Italy: Pretty and classic; needs a little shine!
3. Party dress:  Looks like new because I only wore it once! I wish I had occasion to wear it again.
4. Bathroom Cabinet: A small change that greatly updated our bathroom.
5. Sweater Dress: Still pretty new. An excellent deal and so comfortable!
6. Selected DVDs of classic TV shows: I can watch some shows over and over again.  Which reminds me of #7…
7. Old books that I can re-read and that I never get bored of.
8. Black fake leather purse: Maybe I’m too old for fake leather but I love it and don’t care. It’s sporty but still OK for work environments.
9. Shiny black leather flats: I think I love it more because it’s from a designer brand.  The cobbler was doubtful about adding shoe taps on it until he turned it around and saw that it was made in Italy.
10. Red Land’s End sweater: Work appropriate yet so comfortable. 
11. Gray cardigan: I wear this all the time.  Hides the butt which makes it very practical, too.
12. Dark jeans: It’s on the skinny jean side and I’m sure that trend is over but I do love it.

Just by doing this quick exercise, I realized that love for stuff can wear off pretty quickly.  For example, a pretty blouse from one of my favorite designers would have definitely made this list just two years ago.  It’s still in good shape but I don’t wear it as often anymore for some reason so I can’t say that I love it.

Ironically, in some cases, the more I’ve worn something, the more likely it will fall off the list because it doesn’t look shiny and new anymore.  Since I’m a complicated person (haha), I can also say that if an item does not get that much use, I love it less because it did not meet my expectations in some way.

Furnishings did not make the cut because my kids destroy furniture.  My favorite pillow is stashed in a closet out of reach and I’m tempted to sell or give it to someone who can really appreciate it.

Technology wasn’t included but I admit that I love the use I get out of various tech stuff.  I would give up many things before cutting internet access!

What old things are making you happy right now?  Please include clothing items, shoes, and purses so that I don’t feel shallow.

YMOYL: I Hate Charts

I’ve been sharing my general impressions of “Your Money Or Your Life” (YMOYL) on my journey as a book club of one.  Part of me feels like I should have started the online book club but I would not have been as thorough as minhus and a bout of flu would have killed any enthusiasm.  And as you can see from my distaste for doing the actual exercises, I can’t lead a club if I am doing the minimum to get through the book! 

As I mentioned earlier, I did finally come up with my real wage.  According to YMOYL, this is your hourly income AFTER you add in your commuting time and subtract all work-related expenses from childcare to work wardrobe to lunches.  I think my number is on the low side but I’m sticking to it for now and using that as a mental yardstick to rein in my purchases.  This is working so far and I highly recommend this step!

In Chapter 5, you’re also supposed to figure out your monthly income and expenses, then create an awesome chart so that you can have a visual reminder of your spending habits.  I haven’t take the step of tracking my real-world expenses.  However, I did an estimate which takes my gross income minus health insurance, taxes, and regular monthly expenses.  I looked at my previous year’s expenses for auto insurance, auto repairs and renter’s insurance and divided it by 12 to come up with a monthly amount.  End result: I have a $300 buffer each month.

It’s a bit of a relief to know that I even have a buffer.  At the same time, I’m not sure how/why we have a buffer considering that a few years ago, I estimated that we had about $100 left over after expenses.  Since then, expenses have generally gone up while wages have been stagnant.

Possible reasons for this mysterious buffer are:

• Grossly under-estimated expenses: In other words, I really should track expenses.
• Lower taxes due to child credits? 
• Lower bills for cable, DSL and phones: I re-negotiate expenses all the time but this year, I was able to really trim these bills by reducing cable channels and getting $40-50/month discount off my DSL/phone.  Most years, the rep offers a $5 – $10 discount if I threaten to cancel.  As I learned this year, the offer can vary greatly depending on timing and the customer service representative you talk to!

I may have to suck it up and chart expenses and/or go over old credit card statements to get more accurate numbers.  Part of me thinks that this buffer is real. I included as many variable expenses as possible from gifts to auto insurance.  I also estimated on the higher side for stuff like household goods and toiletries.    However, nothing beats a real estimate based on actual tracking of expenses!

Your Money Or Your Life: Stuck on Chapter 4

Chapter 4 of “Your Money or Your Life” focuses on fulfillment.  The questions asked are:

1. What did you want to be when you grow up?
2. What have you always wanted to do that you haven’t done yet?
3. What have you done in your life that you’re really proud of?
4. If you knew you were going to die in a year, how would you spend that year?
5. What brings your the most fulfillment – and how is that related to money?
6. If you didn’t have to work for a living, what would you do with your time?

I am stuck. I have no answers or rather my answers change depending on my day and mood.  I think one of the big problems is that my proudest accomplishments are related to my current line of work, yet I’m not sure that I want to be in this job or field for the rest of my life.

With this in mind, here’s my attempt at answering those questions:

1. I wanted to be a dancer at some point but I can’t dance well.
2. Don’t know.
3. All related to my work, or just that fact that I had kids.
4.  Travel, or live in a foreign land for a year.
5. I love living in foreign places and getting to know a city or place. I love learning new things and challenging my mind.  I also find it very fulfilling when I help other people even if it’s simply giving advice or support in an online forum.
6. I would live in a beautiful natural environment, work in a garden, exercise, eat well, spend time with my family, and read / write blogs.  I would do something to make a difference…not sure what.

I have no idea how these answers can shape my life.  Maybe it’s because I skipped some exercises in earlier chapters?  Help…

Although this wasn’t addressed, I do want a somewhat comfortable life.  Everyone’s definition of comfort is different.  For me, that means money in the bank to take care of emergencies, fly and visit family members, take care of my family’s health from braces to major medical care, get cleaning help sometimes, and to buy some pretty clothes every so often.

I also don’t want to be too dependent on the kindness of others.  At least among my friends and family, I’ve often noticed that the poorest members get tons of hand-outs from small favors to plane tickets.   I’m sure others are glad to help but I would worry that my livelihood is dependent upon someone else having to work the grind so to speak.  (If I am ever in that situation, I would make sure to return the favor in other ways via my time but so many people just seem to get used to receiving and not giving help, in my opinion).

So the bigger question is what is enough?