I’m working my way through the steps in this book, so will withhold my thoughts until I’ve completed them. However this is one of my favourites, enough so that I’ve read it twice. It lays out a program to re-evaluate our relationship with money, how we acquire it, how we spend it, and how we think about it. The program requires a significant investment in time and energy, but promises so much. Watch this space.

My notes

Repeat after me. To have savings is to be free. Savings means freedom from debt. Money in the bank means freedom to leave your job if the boss is intolerable or the benefits have just been yanked. And if you lose your job, having savings is the freedom to keep your house and car because you can cover your payments — if you have any to make in the first place.

In order to gain Financial Intelligence you first need to know how much money you already have earned, what you have to show for it, how much is coming into your life and how much is going out. But that isn’t enough. You also need to know what money really is and what you are trading for the money in your life.

Financial Integrity is achieved by learning the true impact of your earning and spending, both on your immediate family and on the planet. It is knowing what is enough money and material goods to keep you at the peak of fulfillment — and what is just excess and clutter. It is having all aspects of your financial life in alignment with your values.

People who have followed the program… stop buying their way out of problems and instead use such challenges as opportunities to learn new skills.

Those participants who have achieved Financial Independence have discovered the fulfillment that comes from contributing their time, talent and love to the welfare of our planet and its inhabitants.

He’d graduated from college and gotten a wife, a skill, a job, a car, a house, a mortgage and a lawn to mow. Instead of feeling like a man, however, he felt increasingly trapped.

What they do for money dominates their waking hours, and life is what can be fit into the scant remaining time.

… we may have all the comforts and even luxuries we could ever want, but inertia itself keeps us locked into the nine-to-five pattern.

The bottom line is that we think we work to pay the bills — but we spend more than we make on more than we need, which sends us back to work to get the money to spend to get more stuff to…

Me: We borrow for progress without questioning whether the progress is really even needed.

If you live for having it all, what you have is never enough. In an environment of more is better, “enough” is like the horizon — always receding. You lose the ability to identify that point of sufficiency at which you can choose to stop.

Our economy’s version of “more is better” is “growth is good.” Modern economics worships growth.

We no longer live life, we consume it.

Part of why our “consumers” have less money to spend is that saving has clearly become un-American. Even the language of modern economics promotes consumption.

We need to shift from an ethic of growth to an ethic of sustainability, which will certainly require each one of us to transform our relationship with money and the material world.

More marriages are wrecked by money than any other factor. Why?

… the mind is a pattern-making and pattern-repeating device.

When we think there must be more to life, we buy something. A workshop. A self-help book. A therapist. A house in the country. A condo in the city.

Me: Use what we already have. This appears over and over.

Until one day we found ourselves sitting, unfulfilled, in our big home on two and a half wooded acres with a three-car garage and expensive exercise equipment in the basement, yearning for the life we had as poor college students who could find joy in a walk in a park.

Part of the secret to life, it would seem, comes from identifying for yourself that point of maximum fulfillment.

So what’s all that stuff beyond enough…? Clutter, that’s what! Clutter is anything that is excess — for you. It’s whatever you have that doesn’t serve you, yet takes up space in your world. To let go of clutter, then, is not deprivation; it’s lightening up and opening up space for something new to happen. … Enough is a wide stable plateau. It is a place of alertness, creativity and freedom. From this place, being suffocated under a mountain of clutter that must be stored, cleaned, moved, gotten rid of and paid for on time is a fate worse than dearth.

Unfinished projects sap you of vitality.

How many of the power lunches, cocktail parties, social events and long evenings glued to the computer or TV screen have been clutter — activities that add nothing positive to your life?

Hobbies are clutter-intensive when the ratio of what you have to what you use climbs — like photography buffs with suitcases of lenses and filters who get their best shots with a pocket digital.

He, and most of the rest of us, keep doing “more, better or different” within the same limited field of options and opportunities, without ever questioning whether or not the game is worth playing at all or whether there might be a better game to play.

Even friendship seems to cost money. Do you need to spend money to enjoy the company of your group of friends?

We all have a money personality. Until you become conscious of your own you don’t have a choice about your behaviour.

Money is a “store of value” and a “means of exchange” only within the confines of cultural agreement.

Beyond the borders of the city — i.e., the known and familiar — other choices are available. You are not a prisoner of the city, destined to spend your life making money in the marketplaces it offers.

Money is something we choose to trade our life energy for. We will repeat this because you may have missed its full significance: Money is something we choose to trade our life energy for.

So, while money has not instrinsic reality, our life energy does — at least to us. It’s tangible, and it’s finite. Life energy is all we have. It is precious because it is limited and irretrievable and because our choices about how we use it express the meaning and purpose of our time here on Earth.

Financial Independence is an experience of freedom at a pyschological level. You are free from the slavery to unconsciously held assumptions about money, and free of the guilt, resentment, envy, frustration and despair you may have felt about money issues.

In The Millionaire Next Door the authors, Thomas J. Stanley and William D. Danko, note that people who have achieved a high net worth relative to income know how much they are spending on clothes, travel, housing, transportation, etc. and those who don’t achieve high net worth relative to income have no idea how much they spend. It’s a stark contrast.

This step is crucial to the whole rest of the program [converting “money” spent in spending categories to “hours of life energy”], which is why those people who proudly report that they are on the program because they’re keeping track of every penny are so off base. This step provides insight and empowerment and will be worth every minute you invest in setting it up to work for you.

The dream of travelling around the world becomes two weeks a year of hitting the tourist traps.

So many of us have spent so many hours, days, and years of our lives devoted to someone else’s agenda that it may be hard to get in touch with our dreams. … Indulge yourself now. Stare out a window. Shut your eyes. And envision what would be a truly fulfilling life for you.

The affluence that surrounds us has been called the American Dream, and with good reason: we’ve been asleep. We wake up by questioning the dream. Asking yourself, month in, month out, whether you actually got fulfillment in proportion to life energy spent in each subcategory awakens that natural snese of knowing when enough is enough.

Another way to measure your movement toward your purpose is through the Purpose-in-Life Test, based on the work of Victor Frankl. Having survived the Nazi death camps, Frankl observed that there was a factor beyond the intellect or psychology that allowed some people to retain their humanity in inhumane circumstances. This factor, he concluded, was “meaning” (or purpose) — a capacity to find, through deep dialogue with one’s conscience, a positive significance in the events of one’s life. The will to have meaning and purpose in life, he said, is superior to the will to have power or the will to find pleasure. Indeed, these latter drives take over when the will to find meaning has been thwarted. Frankl also observed that “being human means relating and being directed to something or someone other than oneself.”

When your actions are out of alignment with your values, you can experience fear, guilt, frustration and emotional imbalance. Fortunately, you can get rid of those negative, unwanted feelings. You can either:

1. Change your actions to align with your values, or
2. Change your values to align with your actions.

— Charles Givens, Financial Self-Defense.

The steps of this program work synergistically, building upon and enhancing one another. So just relax and do the steps. Over time, amazing changes will occur — not only in your relationship with money but in your relationship with life itself.

Synergy occurs within an individual when all aspects of his or her nature are aligned and focused in the same direction.

… “enough” has four components, four common qualities:

1. Accountability, know how much money is flowing into and out of your life, is basic Financial Intelligence. Clearly if you never know how much you have or where it’s all going, you can never have enough.

2. An internal yardstick for fulfillment. … you can never have enough if you are measuring by what others have or think.

3. A purpose in life higher than satisfying your own wants and desires, because you can never have enough if every desire becomes a need that must be filled. … What is a purpose higher than getting what we want? The opposite of getting is giving — and therein lies a secret to fulfillment. Beyond the point of enough, we achieve happiness by exercising our capacity to give.

4. Responsibility, a sense of how your life fits with your community and with the needs of the world.

Following the steps of this program, doing your tracking and Monthly Tabulation and asking yourself the three questions will become so simple, so much second nature, that you might wonder what would happen if everyone who’s living on “more than enough” did it. The dream of a sustainable world might begine to seem quite possible if what wasn’t needed, the clutter of life, faded away.

“He who knows he has enough is rich” — Tao Te Ching.

But the real learning — and real fun — comes as you plot your figures month by month, year by year. … It will show you your motion, and it will also move you — renewing your commitment to keep going.

There are two keys to making this process work for you: 1. Start. 2. Keep going.

There’s another key to successfully working with your chart [progress chart tracking income vs expenses]. Hang it where you can see it every day. To do the most good, the chart must be visible so that it can inspire you — often — to stay on track. You will need to hang it up — but where? … How would you feel about hanging this graphic representation of your financial affairs on your living-room wall, right out where everyone who comes into your house could see it? Would you feel at ease — or uneasy? The degree of your discomfort is a measure of the degree of your financial dis-ease. Don’t worry. That uneasiness will disappear as you follow the steps of this program.

In the strictest sense, Financial Independence, as we have defined it, means having an income sufficient for your basic needs and comforts from a source other than paid employment. But there are other aspects of FI, such as getting out of debt and accumulating savings.

… debt that ties us to our jobs. It’s debt that keeps us with our noses to the grindstone, making a dying to pay off pleasures we’ve long forgotten and luxuries we scarcely have time to enjoy.

Getting out of debt is one form of Financial Independence. Retiring your debt returns to you the freedome to choose.

Frugality is enjoying the virtue of getting good value for every minute of your life energy and from everything you have the use of.

Frugality means we are to enjoy what we have.

Waste lies not in the number of possessions but in the failure to enjoy them. Me: Again, make use of what you have. Enjoy what you have.

To be frugal means to have a high joy-to-stuff ratio.

Frugality is the balance we seek. … Frugality is being efficient in harvesting happiness from the world you live in.

People above the line of base subsistence, in this age and all earlier ages, do not use the surplus, which society has given them, primarily for useful purposes. They do not seek to expand their own lives, to live more wisely, intelligently, understandingly, but to impress other people with the fact that they have a surplus… spending money, time and effort quite uselessly in the pleasurable business of inflating the ego. — Thorstein Veblen, The Theory of the Leisure Class

There are two sides to the coin of living beyond your means. The shiny side is that you can have everything you want right now. The tarnished side is that you will pay for it with your life.

He who hesitates saves money. The bright side of living with your means is that you will use and enjoy what you have and harvest a full measure of fulfillment from it, whether it’s your old car, your old coat or your old house. It also means that you can weather the economic bad times when they come — which they will.

Parkinson’s Law: Work expands to fit the time allowed for its completion.

Things don’t cost what they cost. They cost what you pay.

… the following needs are universal: subsistence, protection (safety), affection, understanding (making sense of life), participation (being part of some social process), recreation (in the sense of leisure, time to reflect or idleness), creation (making things), identity (who you are) and freedom (choosing for oneself).

People don’t need enormous cars, they need respect. They don’t need closets full of clothes, they need to feel attractive and they need excitement and variety and beauty. People don’t need electronic equipment; they need something worthwhile to do with their lives. People need identity, community, challenge, acknowledgement, love and joy. To try to fill these needs with material things is to set up an unquenchable appetite for false solutions to real and never-satisfied problems. The resulting pyschological emptiness is one of the major forces behind the desire for material growth. — Donella Meadows, Beyond the Limits.

… you might want to give that child a larger-than-normal allowance — but explain that this fund will now have to pay for clothing and other essentials. Many FIers have reported that as soon as their children realized they would have to spend their own money for the stuff they wanted, they became frugal and entrepreneurial quite quickly.

Every time we spend money on anything, we are consuming not only the metal, plastic, wood or other material in the item itself, but also all the resources it took to extract these from the earth, transport them to the manufacturer, process them, assemble the product, ship it to the retailer and bring it from the store to your home.

The key is remembering that anything you buy and don’t use, anything you throw away, anything you consume and don’t enjoy is money down the drain, wasting your life energy and wasting the finite resources of the planet. Any waste of your life energy means more hours lost to the rat race, “making a dying.” Frugality is the user-friendly and earth-friendly lifestyle.

The Buddha said that desire is the source of all suffering. It is also the source of all shopping.

Remember, frugality isn’t about being a cheapskate or a penny-pincher. It’s about honoring and valuing your most precious resource — your life energy.

Learn to chose quality of life over standard of living.

For most of human history, people only worked for two or three hours per day. As we moved from agriculture to industrialization, work hours increased, creating standards that label a person lazy if he or she doesn’t work a forty-hour week… The very notion that everyone should have a job only began with the Industrial Revolution. — Freithjof Bergmann

Everybody, rich or poor, must work three hours a day in order to produce only the extreme necessities of life… work three hours a day and live in the luxury of literary wealth and have time to do what is meaningful to us. — Paramahansa Yoganda

For the last half century full employment has meant more consumers with more “disposable income.” This means increased profits, which means business expansion, which means more jobs, which means more consumers with more disposable income. Consumption keeps the wheels of progress moving…

… we’ve begun to lose the fabric of family, culture and community that gave meaning to life outside the workplace. The traditional rituals, the socializing and the simple pleasure of one another’s company all provided structure for nonwork time, affording people a sense of purpose and belonging. Without this experience of being part of a people and a place, leisure leads more often to loneliness and boredom.

Our jobs now serve the function that traditionally belonged to religion: they are the place where we seek answers to the perennial questionss “Who am I?” and “Why am I here?” and “What’s it all for?”

Our focus on materialism may have robbed us of our pride we can and should feel in who we are as people and the many ways we contribute to the well-being of others.

We look to work to meet many of our needs, and we end up unfulfilled. Why do we give the best years of our lives to our jobs?

Our fulfillment as human beings lies not in our jobs but in the whole picture of our lives — in our inner sense of what life is about, our connectedness with others and our yearning for meaning and purpose. By separating work and wages we bring together the different parts of ourselves and remember that our real work is just to live our values as best we know how.

When at your paid job you can value your life energy by working efficiently, diligently, intelligently and for the highest remuneration possible.

But if who you are and what you do to make money are distinct, as they can be when you disconnect work from wages, you can reclaim your lost self. As you come to know yourself, your values, your beliefs, your real talents and what you care about, you will be able to work from the inside out.

It takes time to know yourself. Time for reflection, for silence, for journal writing, for prayer and ritual, for dialogue with a caring friend to heal the wounds from our past, for developing a coherent philosophy of life and personal code of ethics and for setting personal goals and evaluating progress. Yet, instead of honouring this as important work, we squeeze what we can into evenings and weekends, devoting the majority of our waking hours to the “real work” of our jobs.

Isn’t it true that there is an almost universal belief in our culture that if you are not working for money, not building a career, not employed, you are a nobody?

For the Greeks, leisure was the highest good, the essence of freedom — a time for self-development and for higher pursuits.

It’s okay to relax in the shade and listen to the birds. It’s okay to take a walk to nowhere in particular. Leisure is not an identity crisis if you know you are not your job.

Unbounded opportunities become apparent once the mind is freed by separating the functions of creative work and income distribution. — Willis Harman

When you break the conceptual link between work and money, you give yourself the opportunity to discover what your true work is. Me: This is what my sabbatical is about. Discovering what my true work is. And then doing it for the rest of my life.

Breaking the link between work and money gives you back your life. You no longer need the stamp of approval called a job to give you all the emotional, intellectual and spiritual benefits of being employed. You may even find out that it is not necessary to tie yourself to a nine-to-five grind for the rest of your life just to support yourself.

The people we’ve met in these pages have had to do a lot of soul-searching, risk-taking, experimenting and challenging of old beliefs in order to move forward into jobs with higher pay and high integrity. They’ve had to see that their lives are bigger than their jobs.

There is power in knowing that you hold the reins and are in control of how many hours, days, weeks and years you need to work for money, in knowing that you can set an accurate goal for how much money you need to sustain yourself at the lifestyle level you choose, in knowing that once you have that amount, making money doesn’t have to be the sole criterion for what you do. These insights can provide you with the motivation necessary to raise your income to new heights.

It’s not that you’ve whittled your expenses down to the bare subsistence. You’ve simply brought your life into harmony, and you just happen to know, to the penny, how much harmony costs.

Breaking the link between work and money in actual fact will exponentially expand the possibility of discovering your true work…

If you buy what is on sale and in season and you build recipes around what you have, not around what is recommended in a book written by someone with twice your income, your food cost can stay stable even when “prices are going though the roof.” If you buy for durability, repairability, utility and flexibility for everything from your house to your clothes, you won’t be buying these things again for a long time — maybe never — thus lowering your exposure to those items inflating the price.

Consciousness grows faster than inflation… Invest in yourself — in your own capacity to solve problems creatively, in your own inventiveness and adaptability, in your own skills and abilities — and you can at least keep hard-core inflation confined to a few areas of life, not sprawling across your whole existence.

Whatever your level of monthly expenses settle in at, you will want six times that amount readily available in a bank account or money market fund. You are not financially independent until you have a cusion to handle spikes in expenses.