The New Year is a time for renewal. Some people mock this, but I take it seriously. I often use January first as a convenient date to attempt lifestyle changes (though I don't call these changes "resolutions").

(Others, too, take this opportunity seriously. Scott has posted his goals for the coming year, which include a fitness regimen and an ambitious reading plan.)

One of my objectives every new year is to regain physical fitness. That's a tired subject now, and I'm not going to belabor it, but I am pursuing the goal again.

This year I have an additional goal: to change my relationship with money.

I do not want for money. I make a fine salary, and I do not live beyond my means. I do, however, live exactly within my means. I do not save. I have not built additional debt for many years, but I've been slow to eliminate existing debt, always paying minimums. I've lived paycheck-to-paycheck, not in a desperate sense, but in a "I spend all the money I earn" sense.

Ever since my The Man I Want to Be entry (or maybe a little before), my relationship with money has been changing. I've been using the library more, buying fewer books. I avoid Costco (and for good reason). I resist the urge to buy movies and music more. My priorities have changed.

Early in the fall I drafted a "Debt Plan", which I always carry with me. When I'm tempted to spend money on something frivolous — which generally means comic books in some form or other — I pull out the Debt Plan and remember my goal.

You know what? It's working.

In the past three months, I've paid off three lingering debts. Today I'm paying off my car. By the end of February, I will have paid off all the smaller debts I've accumulated over the years. All that will remain are the two mortgages. I'll spend eighteen months to two years attacking the second mortgage, and then I'll pause to re-evaluate my position.

If I've continued to resist the urge to spend, I'll have a couple of options: I could attempt to pay off the primary mortgage, or I could pour my money into investments. Both options are good, being two sides of the same coin. I'm not sure which I'll pursue. Maybe I'll pursue both.

While Scott plans to read 250 books this year, my goals are less ambitious. I average about fifty books a year. This year, though, I'd like to read one hundred books. This is achievable and, what's more, pursuing it would re-direct me toward that which I value most: knowledge and learning. I'm going to work toward this goal by supplementing my normal reading with additional audio books, and by reading many of the "thin" books on my shelves (books of under 200 pages).

Over the past few months, several friends have recommended various books which might best be termed self-help manuals. I've accepted these recommendations gratefully, but haven't actually ever read any of the books. I decided that now would be a great time to change that.

The first book I read (recommended by Mistie) was the chatty The Total Money Makeover by Dave Ramsey. As a book, it isn't isn't much. In fact, it feels like a longish magazine article that's been inflated to book size. The information that's here, however, is useful. In fact, his advice seems to mirror my own money plan, as described above. To wit:

Step #1: Save $1000 as an emergency fund.
Step #2: Pay off debts, starting with the smallest first (ignore interest rates).
Step #3: Increase the emergency fund so that it will cover three to six months of expenses.
Step #4: Invest 15% of income in growth-stock mutual funds.
Step #5: Pay off the mortgage.
Step #6: Build wealth.

(I've left out the "Save money for college" step because it doesn't apply to me.)

The next book had similar advice, but presented from a more practical hands-on perspective. Two years ago, Michael gave me a copy of Your Money or Your Life by Joe Dominguez and Vicki Robin. I've browsed through it before, but only now found time to read it.

Your Money or Your Life presents an actual plan that the authors would like the reader to follow in order to change her relationship with money. The broad steps of the plan include:

Step #1: Determine how much money you've earned in your life. Next, determine your net worth.
Step #2: Establish the actual cost — in time and money — required to maintain your job. From this derive your actual hourly wage.
Step #3: Keep track of every cent that enters or leaves your possession.
Step #4: Determine which items are actually worth the money you spend on them.
Step #5: Graph your total monthly income and your total monthly expenses.
Step #6: Minimize spending through conscious decisions.
Step #7: Maximize income by doing something you love.
Step #8: Accumulate capital. Track its growth.
Step #9: Invest this capital so that it provides long-term income.

I've vastly oversimplified this book's approach, and I've left out its most important concept: the authors want the reader to begin to equate money with "life energy". They want the reader to understand that every dollar earned or spent represents some amount of work necessary to obtain that dollar. Every choice made must be evaluated not in terms of its financial impact, but in terms of its impact on quality of life. I should be asking myself: "Is buying this comic book compilation worth working an extra few hours? Or would I rather spend that time reading or writing?" Couched in these terms, the answer is quite clear. The authors want to break the consumerist mentality.

The authors want the reader to redefine her relationship with work. They want the reader to redefine his relationship with money. They want the reader to live a life of contentment, satisfied with the simple pleasures. (I love their ways to save money: "Don't go shopping. Live within your means. Take care of what you have. Wear things out before replacing. Do it yourself. Anticipate your needs. Research value, quality, durability, and reusability. Buy things for less. Buy things used.")

I'm not much for plans, even when they're sound, as this one is. I'm not a plan type guy. However, there are many things that can be culled from this book. Generally, the advice is similar to the first book I read: establish an emergency fund, pay off debt, invest your money. The difference is in the details. The Total Money Makeover only paints a broad picture; Your Money or Your Life describes the individual brushstrokes.

I'm glad to have read both books. I'm not after some get-rich-quick scheme. I have enough money. What I want is a sort of lifestyle that does not depend on work, one that allows me to sleep late, to read, and to write. I want a pastoral lifestyle. And I think, at last, that lifestyle is in sight. (Even if it is more than a decade away.)

On this day at foldedspace.org

2004 — Very Very Cold   It's cold. It's snowing lightly, too. We hope that the weather won't prevent people from joining us for tonight's Ham Feast.