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| Photo: clammyclaudia Going back through the YMOYL posts has provided a fun way to track what's blooming when in this especially warm year. This week is all about the lilacs here in central Ohio. What's blooming near you? |
In step five we're instructed to "make visible the results of the previous steps, plotting them on a graph that gives you a clear, simple picture of your current relationship with money (life energy) as well as the trend of your financial situation, and the transformation in your relationship with money."
Step Five
In order to do step 5, we're asked to graph our income and expenses, setting up a graph that is large enough for three to five years of expenses. You can do this on a computer or by hand.
Chapter five also brings up the purge and splurge cycle, the trend of many on the program to immediately restrict spending following starting the wall chart. Then, as with most overly-restrictive programs, after a month or two of deprivation, spending usually rebounds back to former levels. Have you fallen victim of this cycle?
I haven't even created a wall chart yet and I've already experience this phenomenon, simply from going through the exercise of tracking my expenses. January and February were record low spending months for me, which allowed me to save much more money than usual. March was a different story, as I gave myself permission to buy seeds, potting soil and other gardening supplies for the 2012 season. But my purchasing didn't stop there, I also went to the salon.
This chapter also addresses an issue that has come up in the comments of these posts, namely how to address months where unusual expenses are due, like insurance payments, property taxes, etc. YMOYL makes the very good point that almost every month can be considered an unusual month, whether it's a bill coming due, an unexpected repair expense, etc. So you can either track these expenses as they occur, or prorate them and spread out the expense each month. It's all about finding what works for you and gives you the clearest picture of your finances.
Let's chat!
Has anyone actually created a wall chart? If so, did you find it helpful? I admit, this step is the one I've been dreading most. What's been your biggest challenge so far? Are you still motivated to complete the rest of the YMOYL program?
Well... to be honest, I never did the wall chart. By this point in the process I really didn't need any further motivation.
ReplyDeleteFor me the key was coming to value my own life energy and to realize that I actually had a right to make money... and that earning a decent salary didn't have to mean a descent into the world of consumerism and all of its associated BS.
Anyhow, over the next 10 years I basically worked my tail off to raise my salary and the salaries of everybody working around me, and ended up doubling them. So in a funny way, I started putting much more energy into work, but it had a new focus and purpose: freedom!
And as I watched the people around me go from making slave labor wages to making decent middle class salaries, it was sort of fascinating to watch their spending habits grow right along with it. That, more than anything, helped to keep me honest with my frugal living and savings strategies. Seriously, watch a banjo player take out a $250,000 interest only ARM to buy a house that he obviously can't afford and doesn't really need, and it snaps you back to reality pretty darned quick.
I watched my co-workers spend money on clothes, and vacations, and cars, and gadgets, and really, REALLY stupid mortgages, and all the while I just kept thinking that instead of treating myself to endless distractions, I'd rather spend my time and energy working toward a life that I didn't feel the need to get away from.
And the really funny part was that while all the people around me were constantly worrying about money, I was not. That, combined with the fact that I was socking away as much of my salary as legally possible into the retirement plan, led to the insidious rumor that I was some sort of a trust fund baby. It was totally hilarious!
I'm not saying that everything was all lollipops and roses during this period of my life, because the reality was that I was working my ass off, but somehow the knowledge that I was working toward freedom, that the hard work was for me made it feel empowering rather than like drudgery.
"I just kept thinking that instead of treating myself to endless distractions, I'd rather spend my time and energy working toward a life that I didn't feel the need to get away from."
DeleteVery wise, Cat, very wise indeed.
Aw, why are you dreading this step? At least this one is easy--it's getting the numbers that's hard.
ReplyDeleteI've made the wall chart before, and it was not exciting. My salary is generally flat for 12 months straight, and then there may or may not be a small rise, and then it is flat for another 12 months. I don't know where everyone in all these examples in the book gets all these ups and downs, mostly ups.
Plus I'm basically out of ways to make my expenses go down that I am willing to do.
But I'm trying this again. First of all, my income is much more interesting these days since I quit my job and have been getting offers of half-time temp jobs.
For expenses, I'm going with the pro-rating method, though it's not always that easy to guess what things are going to cost ahead of time. I like this method because the ups and downs are smaller and better reflect my decisions on things like gardening supplies and going to the salon rather than when various things need repairing and when various expenses come due.
I started by making the chart on my computer. I like this because you can see even tiny changes because the line usually won't be perfectly straight.
But then today I decided to also make a wall chart, which has the advantage that I would see it more often. I do look at my computer graph several times a month, but certainly not daily, and I think the point of this is to have a very regular reminder, even when you're thinking of other things.
I couldn't find my graph paper, but my roommate had some. Then I had to decide where to put the chart. First thought: on the cabinet next to my desk. I sit there often, at least once a day. Or should I stick it on the fridge? Or should I have it in my work notebook that I look at every day? I decided to go with my first thought, mostly because then it's convenient to take it down every month at my desk and add the next dots and because it shouldn't get too wrinkled up that way. I'm pretty good with the tunnel vision, so I may still not notice it much. We'll see.
I'm still motivated to complete the program. In fact, I am reading ahead. But am I actually really doing anything differently as a result? For the first time, I am doing some of the recommendations in chapter 7, partly by accident, which has been interesting. And I have some ideas for variations on the crossover chart in chapter 8 which may be more motivating to me than the regular since I have a pension.
In other news, what's blooming here are roses (after lots of rain). The bluebonnets are still holding up. And of course there's lantana and rosemary, which are virtually always blooming.
I actually went out and bought some graph paper about 4 years plus ago when I first found the book. I never used it! I’ve just had a look and it’s still behind the filing cabinet covered in dust. I’ll get it out and think about having another go. I definitely have splurges’- my 2 weeks overseas trip I returned from last week is testament to this : ). I’m still trying to habituate to keeping track of my spending and concentrating on this to date. At the end of the month I will covert to life hours and think about the graph. I might even incorporate my overseas trip! I’m not sure how to incorporate the interest from savings as it’s all in lots of little term deposits that mature at different times……I guess I’ll need to average it out. I definitely want to keep it up. This book is also encouraging me to up my income by working extra days to bump my savings. While at the same time I’m being more mindful of spending habits.
DeleteWhat’s in season here? We are just going into autumn but it’s still hot. Some of the gum trees are flowering and the yellow wattles are coming out : ) I’m looking forward to the cool of winter which is our growing season as just too hot in summer.
Ruth in WA x
I'm not sure why I'm dreading it exactly, Debbie. I think it goes back to hating doing graphs in maths class all those years ago. Or it could just be the fact that it feels like overkill, or busy work, once you have the numbers does seeing them on a chart really mean more? Or maybe I have a chart phobia too like O&G. :-)
DeleteAh.
DeleteCan you think of other ways to try for the benefits of the chart without having to make one? Maybe you can display the numbers you're finding. And later, maybe display the first month and the latest month so you can always see the comparison?
Or maybe make a non-scary/more fun chart, like with cats on it? Chasing balls of yarn that are showing the earning and spending patterns?
Making the chart is definitely a pain, but once it's made, updating would be quick, so that's another strategy--just get through this first month and then have smooth sailing.
I think I have a chart
ReplyDeletephobia...and that's why this chapter was especially hard for me.
http://oilandgarlic.wordpress.com/2012/03/27/ymoyl-i-hate-charts/
Thanks for the link!
Delete