Look at all of these pieces of paper and coin that are decorated with busts of old men; we have been brought up to revere the almighty dollar almost as American as mother and apple pie. We invest so much into them that we go so far as to buy special wallets and purses just to collect them all in one place. If we were aliens from another planet that used say. . . energy as a means of value, we would think it odd that humans use so much of their energy in exchange for paper and coin. And now that we are going digital, it is just for a total on a balance sheet. It is worth a little thought about what money really is and what its worth really is in our lives.

Lots of people toss pennies away because they are thought to be more bother than they are worth. When I was a kid, my aunt would give me all the Canadian coins she came across because she thought of them as worthless. My parents grew up in the aftermath of the depression, where everyone was worried about money.  So in response, they never talked about money so that I wouldn’t have anything to worry about. Well they achieved their goal, I didn’t. In fact I never thought much about it – I remember thinking about stuff that would make money but not so much about why I should.

Their method of teaching me about money seemed to work okay while I was at home.  I developed a great work ethic, it just didn’t have a connection to money.  I knew that work was important but I had no idea why.  In fact when I met my life partner, being a car guy, he would convey worth using the least expensive car he could think of – a Hyundai.  There was nothing luxurious about a Hyundai 25 or 30 years ago so it represented the fulfillment of a very basic need – transportation. It gave me a sense of what things were worth when we discussed large items and gave me a reference point to understand the things that other people were referring to.

In much the same way it is worthwhile, for you to think about what money means to you. Do you spend 1/3 of your life at a job away from home in order to accumulate as much as you can or do you know how much time you have to spend in order to eat each month? Converting your rent each month into hours that you have to spend at work, will make it mean something much more concrete.

Your time vs. the experiences that you value. Think about it, crunch some numbers. Maybe you would be happier creating a plan that would make some changes in your life!

photo: 401K

The easiest way to define what you want is to jump ahead say 5 years or 10 or 15 years. List those experiences, practices and accomplishments that you will achieve. Again be specific about what you want your life to look and feel like to you not just a list of the things you want to have accumulated.

Dreams are good here – do you want to travel? start a business? Remember to be as specific as you can.

What is important to you will become obvious as you continue to think and write.

photo: dorena-wm

We are taught by example that spending 1/3 of our life and energy making money is normal and necessary. Then we get caught up in a vicious cycle of buying more

One of the first concrete things you can do is to identify your situation.  You want to write very specifically what exactly isn’t working in your life and what you would like to accomplish.  Like everything that you want to change, you need to address the changes you want to make in such a way that someone else could interpret them accurately.

For instance, most people don’t have enough left at the end of the month.  Instead of saying, “I want more money to finish out the month”, you need to say “I want to be able to add $150.00 to  my credit card bill that I pay with my second paycheck every month”.

Additionally, when you cash your paycheck and pay your bills, write down how you feel and how that affects you.  How do you feel about your credit card balance or car payments?  How about the amounts that you let yourself spend every month, do you feel good about your debt payments or do you feel deprived all the time?

Do you regularly lose sleep because you worry? or fight with your spouse?  How about your health? Is it suffering? Do you ignore your bank or credit card balance regularly so that you can buy stuff and don’t feel deprived?

At this point, you are familiarizing yourself with your money and the habits that you have developed over the years.  Write these things down so that you can’t pretend that they aren’t reality.  You are just asking questions and writing without judgement.

It is vital that we identify what is most important in our lives. Those things that we recognize as most important are the things that we will dedicate our time to.  Money can by things but it an also buy time in that it can free you up so you can use your limited time to do things that you value.

It is important to understand that you can use money to buy the services of people so that you can use that time to spend doing those things that are most important to you – i.e. spend the afternoon with your husband instead of spending 2 or 3 hours shopping for the week.  However you have to be willing to allow your food choices to be made in part by someone who is not concerned about your family’s health.  You can put organic tomatoes on your list but you may get back a bag of sad-looking fruit that you wouldn’t serve to your dog. There are always compromises in life and you have to make decisions about is most important to you.  Maybe grocery shopping is too important to you but how your house gets cleaned once a week is not so important, at least not when it is compared to the time that you get to spend with your kids.

If you have decided that the time to do your own thing is more important than dedicating your life to work 8-12 hours a day than you want to find out all the different ways to invest so you can decide which ones work best for you.

1. So start by making a list of the things that are the most important to you. Often writing this down is helpful as it forces you to be specific and realistic.
2. Now get an hourly calendar for a week and designate the hours you sleep as well as the blocks of time you have already committed to an employer or for school. The rest of the time you theoretically have open for prioritizing.
3. Now integrate your two lists. You may need to adjust the things that are important to you to fit into the time slots that you have made available to you.

However, if you decide that something is a priority for you but you can’t find a time slot for it, then you have to decide if you can use money to free up some of your time or if you are willing to give up or adjust a current money-making activity to create more free time.

Once you have your priorities established, the techniques you will need to use to order your financial life will become much more clear. Establishing your priorities will make sure that you start with a plan that includes what is important to you. Personal financial planning is not something that you want to take a stab at. It is much easier for you to stick to a plan that fulfills you is not a template that everyone can fit into.

Most people assume that not having enough money is the cause of their financial struggles. They focus their energies on making more instead of learning to manage what they already have. Making more money just allows us to ignore what’s not working by throwing more resources at it. You can ignore the few dollars you spend every day on a latte and lunch at the local sandwich shop every day if you make enough.  But pretty soon a few dollars here and there add up to more than you realize and you have to make even more so you can ignore it still. Money problems usually  have very little to do with math – more zeros just mean bigger math problems! Instead the issue can be reduced to be mostly about the relationship people have developed over the years with their money.

Absolutely everyone has a relationship with money – whether they want to or not and whether they know it or not.  From the time we were little and our aunt gave us Canadian money (cuz it wasn’t real) and we learned that it could buy stuff, we began relating to it and learning what it means to shop. The meaning that we attribute to money largely determines our relationship with it and results from all our personal history, culture and experience. The healthier your relationship with money, the less likely it is that money won’t distract you from the personal relationships with the people who mean the most in your life.

And just like your relationship with people, you can modify your relationship with money at any time. If you are rich enough, you can pay somebody else to make sure that all your bills get paid. But you give up significant control and flexibility by not fostering a relationship with your money not counting the fact that you are adding a significant and unnecessary expense to your finances. Stick around for more talk about your money and how to think about it!

The most important question – and your answer, in life is about the kind of life you want to make for yourself – to live every day for most of the rest of your days. So many of us slide along thinking that some fabulous opportunity will eventually present itself. Instead life happens and we end up putting together the best that we can while we go on waiting. The state of the economy at the time largely determines what our personal economy will consist of. I am not referring to your specific vocation, I am talking about broader matters than that.

What are your priorities? What do you want to end up with when you have worked for 40 years. Is the next generation of paramount important? or are you more interested in having an impact on the present? You have 24 hours in every day, is it more important for you to spend your disposable time with the important people you have gathered or would you find more satisfaction in sharing your ideas with the unknown masses.  Do you want to accumulate massive wealth (for your children) or do you want to spend your time accumulating experiences.

Culture began several hundred years ago with two people sharing the massive responsibilities of building a productive life. Now, in the US,  we subscribe to the independent theory that we only succeed as people if we can create a productive life all by ourselves.  Produce wealth, raise successful children, enjoy an active social life and create an atmosphere that promotes personal health and happiness. This is a huge plateful and not many have accomplished it entirely on their own. It may not take an entire village but it does usually take more than a single person and that’s okay. Everyone has their strengths and only by recognizing and taking advantage of that fact can we truly feel fulfilled both personally and socially.

Its never too late in life to decide how we want to spend it. It can only rob you of valuable experiences to turn a blind eye to making a decision.