For the longest time I had no clue what money was for. I just knew that to live in our society there are essential things we have to pay for. Things like food, shelter, utilities, and transportation. But then once those were taken care of, it wasn’t really clear what I was supposed to do with the money that was left. The prevailing thought, it seemed, was that money left over was supposed to be spent on things. Many economists and financial professionals call it disposable income after all. And I often heard people say something like what’s the point of saving so much? You can’t take your money with you when you die. There were people who mentioned the importance of saving, but they were few. And the advice often seemed more of an afterthought to the ever more important issue of which things you could afford to buy with your disposable income. So even though I avoided consumer debt in my younger years, I spent a lot of money on things I shouldn’t have. In hindsight, I just didn’t understand what money was and how it should be used.
To understand what money is, we have to examine how we obtain it in the first place. We all know that there are 24 hours in a day. Most of us spend about 8 of those hours sleeping, which leaves us with about 16 hours left in our day. How do most adults spend those remaining hours? Personally, my job requires me to be at the office for at least 8 hours a day. But in reality, I have to be up and awake at least 30 minutes in advance to shower, brush my teeth, pack my lunch, and dress myself to get ready for work. The commute to work takes another 30 minutes of my time, which means I spend an hour each day commuting to and from work. And once I leave work, it takes me 30 minutes to decompress from the mental and physical fatigue. This means I spend at least 10 hours a day doing work related things even though I am only paid for 8 of those hours. But more importantly, the result is that I only really have about 6 actual hours of free time each day — time I can use for my own sake.
I’m fortunate enough to realize that free time should be spent on meaningful activities. So I either go to Judo practice or the gym to workout with Kubo Queen right after work. However, I suspect that many people are so drained from the workday that all they can really do is drag themselves to their couch and lay down on it as soon as they get home from work. Then maybe they watch a Netflix show (but not the one where you have to read subtitles, of course, since that is way too much work after a long day). And they eventually eat an overpriced and unhealthy frozen or takeout dinner sometime in the night, before going to bed to get some sleep so they can do it all over again the next morning. All the while, the hopes of learning and improving some new, cool, valuable skills and knowledge (e.g., painting, drawing, writing, playing and composing music, woodworking, beer brewing, fitness, martial arts, etc.) or having more time to spend with loved ones drifts away as the cycle continues for years.
When we take the time to step back, pause, and think, we quickly realize what we really give up for money. If we dig down a bit deeper it becomes quite obvious that what we are trading for money is a significant chunk of our life*. Consider this — the average life expectancy in the United States today is 79 years. How old are you now? And, based on that, how many more years can you realistically hope to live your life? Let’s say, for example, that you are currently 30 years old. You might think that you’re still pretty young, but that means you might only have about 50 more years left to live. In other words, you only have about 438,000 hours left to live. If we assume that you sleep (or try to sleep) for at least 8 hours each night, then that means you only have about 292,000 hours of actual waking moments left. As you can see, our life is finite — a nonrenewable resource. In fact, 292,000 hours doesn’t seem that long. And here is the crazy part — we haven’t even taken the hours spent on obtaining money (working a job) into account! Surely our free time is significantly shorter. But I’ll let you do the math…
I suspect that this idea, that money literally represents a big chunk of our life (or waking hours), is not that new to people. Most people have probably known it subconsciously, but just didn’t give it the careful thought and observation it deserved. I remember the first time it started to grip my mind. It was during a mind-numbing summer internship I had during college. I worked for a big credit card company, in a city two hours away from my hometown, as a software engineering intern. I had a fancy title with a great salary for that summer. However, to make a long story short, the team that hired me did not actually have a project (or any significant work) prepared for me. So I was really bored out of my mind everyday during work hours. It got so bad at one point that I started watching YouTube videos in front of my boss to distract myself from the boredom. And, eventually, I started dreading the day ahead during the workweek. I didn’t enjoy my life at the time, to say the least.
I was so put off with the experience that during the internship, and for a good while after it, whenever I wanted to buy something that wasn’t essential to me, I would catch myself asking these questions — how many hours would I have to sit at that chair and be bored out of my mind just to earn the money to buy this thing? How many mornings would I have to wake up dreading the day ahead to earn the money? Is this thing still worth it? If I thought it wasn’t worth it, then I simply did not buy it or did not pay for it. Otherwise, I just sucked it up and coughed up the money. For example, instead of taking out another $5,000 of student loans to cover the tuition for my last semester of college, I decided to just pay for it in cash using a chunk of the money I saved from the internship. In other words, I started making sure that all the money I earned was put to good use.
Having a clear understanding of what money truly represents pushes me to do my best at treating all the money I earn with respect. This is why I didn’t ridiculously inflate my lifestyle when I landed a good paying job after college. This is why I do not take on debts unless there are compelling reasons to do so, like getting a college degree that increased my earning potential, and why I pay them off as quickly as possible. I also save and invest a lot of my money so that one day Kubo Queen and I do not have to work as much (more on this idea later)**.
Now, of course, I have to admit — I’m just a normal person and there are things that I spend quite a bit of money on that other people probably wouldn’t. For example, I spend money on Judo tournaments. The tournament fees and the travel expenses add up over the course of the year. I love eating out at a restaurant a couple times week with Kubo Queen. And I enjoy buying good quality ingredients for the meals I cook at home. However, these expenses are intentional and only done when the essential things have been taken care of (like directing 73% of my paycheck towards my student loans, contributing to a retirement account, and paying monthly bills). And the value and enjoyment I get out of them are in proportion to the money I spend. So, to me, they are worth it. Treating the money you earn with respect doesn’t mean you have to live ascetically. It just means that you don’t take on unnecessary debts, you save and invest for your future, and you really make sure the money you want to spend on a thing will be proportional to the value and enjoyment you will receive from it. I’ve heard, many times, that life is too short. I agree. So treat your money with respect.
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* This concept really became clear to me when I read the book Your Money or Your Life by Vicki Robin and Joe Dominguez. This essay is indebted to them.
** The basic idea is that if you save a lot of money now, more than your average person, then you’ll have the ability to retire earlier. This idea deserves many more articles which will be posted in the near future.
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