This is the first installment in a three-part series about personal finance for the conscious green Edmontonian. It will cover:
- day to day finances
- retirement
- investments
Your Money or Your Life: One of the most important books that I’ve every read.
Day to Day Finances
My family (myself, my wife, and our two kids) got very lucky when the universe handed out its socio-economic status cards. We were raised in one of the world’s richest countries, we received subsidized, world-class educations, and we are entitled to free health care. The vast majority of humanity has never known the riches that we do.
Still, it is possible to waste any amount of money, and in my opinion much of the wealth in Canada and Alberta is wasted. It is spent on things that don’t provide much benefit to the spender, and in some ways it negatively affects the spender’s mental and physical health.
The answer for my family has been Your Money or Your Life. My wife and I read this book a dozen years ago, and it helped to set us firmly on the path of voluntary simplicity. For us, voluntary simplicity means living a materially simpler life in order for it to be more fulfilling. It means less paid work, but more time with friends and family. Less stuff, more fun. And less shopping, but more playing.
Your Money or Your Life provides nine steps to improving your relationship with money. It helps you realize that when you’re working for money, you are trading your life force, your precious hours on this earth, for dollars. Wasting money, spending it without getting full value out of it, is therefore wasting your life.
I highly recommend this book (reserve it at the Edmonton Public Library). It has helped us to live a low-impact (for the western world, anyway) lifestyle that includes the following things:
- Time: my wife Rechel and I each work part-time. That means that we each spend four days per week at home. This allows us to eat mostly food cooked from scratch, and to know our neighbours. We are also raising our kids all of the time, not just evenings and weekends. I wouldn’t give this part or our lifestyle up for anything – we have time to spend with friends and family.
- A NetZero House: we have a new house in a walkable neighbourhood. It consumes no net energy, and the yard will produce a good deal of our yearly food requirements.
- Travel: Okay, as I’ve said before, this one isn’t so green. We can’t seem to stop doing it though: in a few years, my family will be taking a year off to travel the world. Another experience that is more important than any amount of “stuff”.
- Financial Security: I fully expect some hard economic times in our life. We are much more financially secure living a simple life style than we would otherwise be.
Following the steps in Your Money or Your Life is an empowering way to improve your quality of life and live green. You’ll be happier, healthier, and doing the right, green thing.
My wife and I read this book in 1996 and it made a huge impression on us both. It is about becoming fully aware of your relationship with money and being fully conscious of the true cost of the purchases you make. The book is not about budgeting, collecting coupons or living a frugal existence on a shoestring. It is left up to the reader to decide for himself or herself whether a given purchase is truly worth it. The principles outlined in YMOYL played a large part in our career choices. We both had opportunities to take higher paying corporate-type jobs but instead chose third-level teaching positions after considering quality of life issues. We have not owned a vehicle for 5 years, primarily for environmental reasons but also because it made no economic sense to keep our vehicle. After crunching the numbers we saw that we could save thousands of dollars each year by simply renting a car for vacations and the other few occasions that we actually needed one. We have not had cable tv for 10 years and instead we rent movies or borrow them from the library. This year we made an unforgettable return journey to visit family in Ireland by train and ocean liner (we really dislike flying). Although it works out at about twice the cost of flying, the whole experience is so much more enjoyable and memorable that it is worth it to us. When we tell people about it, they often respond that it sounds great but they could never afford it. However, many of them spend much more than us on vacations in the long run because they jet off a couple of times a year to places like Mexico, Florida, Costa Rica or wherever. We would prefer to make one special trip once in a while than frequent trips to various resorts that all seem much the same. Anyway, the point is that the book gets you into the habit of making a fully informed, conscious assessment of the true costs and benefits of your spending. If you then decide that an expense is truly worth it, you make the purchase and if not, you don't.
An advantage of lower income is that you're giving less of your money to the government. In fact, the feds will pay you to earn less. The GST/HST tax credit is a direct deposit into your bank account every quarter. If you're single and earn $30000, it's $95.25 quarterly. If you're married with two kids and earn $30000, it's $190.50. That's over $750 per year. Some provinces have similar low income tax credits - but not Alberta.
B.
we still have your copy of that book, I just saw it today.
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