Put your money where your values are
Therefore, I want to go ahead and ask you the question “What do you value in life?” Obviously, the answer will vary from person to person. We all have different things that we value in life. However, after having done countless presentations and speaking to thousands of individuals, I have come to the realization that first, we spend cash on our real needs and we tend to finance our desires with credit. Second, we spend our cash on the things that are important to us.
When I answer the question, “What do I value in life?” I would say that the thing I value most is spending time with my family. I value doing the things in life that make me happy. I would also go on to tell you that I value having the security of some money set aside for emergencies. Recently my wife’s 2007 Nissan wouldn’t start. Because the battery was relatively new, we suspected there was some electrical issue draining the battery. Although this investigative type of work can get out of hand with man-hours, we were not worried. Our emergency savings account allowed us to be worry free.
I have learned that most people would say something similar but when you look at their personal financial situation, it contradicts what they say they value. As I said before we spend our money on the things that are important to us. If you really want to know what is important spend some time studying your bank statements over the past two months and you will discover what is important to you. What did you spend the most money on in the past two months; was it eating out, was it clothes? No matter what the items were the things you spent the most money on were the things you value most.
As previously stated, I value spending time with my family. Therefore, over the years my wife and I have been careful about creating bills that would require us to work more and require time away from our family. Sometimes we as individuals create situations that cause us to spend less time doing the things we value and more time working to finance our lifestyle. What I want you to do is to take a look at some of your large monthly expenses and figure out how many hours per month you have to work to pay for those item.
Here is what I mean, let’s say that you currently earn the average salary of $50K per year. This salary calculates to roughly $24.038 per hour. Now say that you drive a car that costs you $560 per month in payments. This is just the car payment not including the insurance and fuel costs. Let’s not even discuss maintenance costs. According to my calculations, you would have to work 23 hours per month just to make your car payment.
Assuming you work an eight-hour day, you would have to work all day Monday, all day Tuesday and seven hours on Wednesday just to make your car payment in any given week. Now I am not saying that if you didn’t have the car payment that you would not have to work those hours but what I am saying is that because of the past decisions you made it is now effecting your current situation.
Assuming you work an eight-hour day, you would have to work all day Monday, all day Tuesday and seven hours on Wednesday just to make your car payment in any given week. Now I am not saying that if you didn’t have the car payment that you would not have to work those hours but what I am saying is that because of the past decisions you made it is now effecting your current situation.
I am also saying that you now have $560 less per month to do something with your family. As I said previously one of the things that I value most is spending time with my family. By not having a car payment I have more money to spend to enjoy the time that I spend with my family and when I am with them I am not having to worry about going to work so that I can make my car payment.
So I ask the question again “What do you value most?”
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