Step 2: Being In The Present - Tracking Your Life Energy

• How do I calculate my real hourly wage if I have more than one job?
• How relevant is the program if I am retired?
• What if I am semi-retired and living quite frugally already?
• How do I calculate my real hourly wage if I am semi-retired?
• What if a large portion of my income is from investments?
• If I do counseling work for 5 - 10 hrs a week and have investment income, how do I figure my real hourly wage?
• How do I combine two sources of income?
• Should I calculate based on net or gross?
• What if I like the job I am doing and would do it (or part of it) for free?
• What if I love what I am doing?
• How do we calculate life energy when one person has a paid job and the other works in the home?
• When should I enter a credit card bill?
• If I do not pay my credit card in full each month, is there any relationship I can show for interest paid on items bought earlier or overdraws?
• Which books have tracking systems?

How do I calculate my real hourly wage if I have more than one job?

If you have more than one job, you can compute a weighted average for use in the next step (Step 3) of the program. To do this:

1. Complete a separate real hourly wage form for each job.

2. Fill in Box 1 below, listing each job separately with its "Real Hourly Wage" and "Hours Per Week."

3. At the bottom of Box 1 enter the totals for the "Avg Hrs Worked/Wk" and the "$ Earned/Wk."

4. In Box 2, divide your "Total $ Earned/Wk" (A) by your "Total Avg Hrs Worked/Wk" (B) to find your "Weighted Avg Real Hourly Wage."

Box 1
Job 1
Real Hourly Wage $__________	x	Avg Hrs Worked/Wk __________ hours	=	$ Earned/Wk $__________
Job 2
Real Hourly Wage $__________	x	Avg Hrs Worked/Wk __________ hours	=	$ Earned/Wk $__________
Job 3
Real Hourly Wage $__________	x	Avg Hrs Worked/Wk __________ hours	=	$ Earned/Wk $__________
Totals
Total Hourly Wages $__________ (A)	x	Total Avg Hrs Worked/Wk __________ hours (B)	=	Total $ Earned/Wk $__________

Box 2
Total $ Earned/Wk $__________ (A)	/	Total Avg Hrs Worked/Wk __________ hours (B)	=	Weighted Avg Real Hourly Wage $__________

Formula:

Weighted Average Real Hourly Wage = Total $ Earned Per Week/ Total Average Hours Worked per Week

Example:

Joan works at Job 1 an average of 20 hours per week and computes her real hourly wage as $10 per hour. She also works at Job 2 an average of 10 hours per week where her real hourly wage is $40 per hour. Her weighted average real hourly wage for her 30 hours per week is $20 per hour. (Total hours worked per week = 30. Total $ earned per week = $600. $600/30 = $20 per hour.)

How relevant is the program if I am retired?

For retirees, connecting with your life purpose is a much more crucial issue than the mechanics of the program.

Many retirees are profligate spenders, which is okay if they are really getting fulfillment. But many aren't. They're just spending for all of the reasons so many of us spend: habit, advertising, and keeping up with the (retired) Joneses. (Jef Murray)

The basic principles of the Your Money Or Your Life program can help anybody at any age.

1. Your Money Or Your Life helps you create a cushion and a cache as a hedge against future inflation or unexpected expenses.

2. Your Money Or Your Life provides a way (via Step 4) to focus on what you want out of life (the values and purpose questions) no matter how old you are. (Think about what you want inscribed on your tombstone.)

3. Escaping the consumption culture will make you happier, allow you to be more involved with family, community, and volunteer organizations, and is better for the planet regardless of your age or personal financial status. (David A. Heitmiller)

What if I am semi-retired and living quite frugally already?

Sometimes the only option may be to do what you can to earn more money, which is one of the steps. (Monique Miller)

How do I calculate my real hourly wage if I am semi-retired?

It can be calculated as follows: Suppose you receive $200/week and that you sleep and do necessary maintenance for about 12 hours per day. You can calculate your productive or discretionary time as about 12 hours times 7 days per week, or 84 hours.

This yields about $2.38 per hour, or 25 minutes of life energy per dollar spent. This figure is more arbitrary than the one derived for working folks, but it still gives a sense of the limits you might need to place on your spending. For example, with every $1 purchase, those 25 minutes of productive time must be lived. For a $40 blouse, then, you would be required to live for 16.8 hours of productive time (1.4 days of calendar time) before you will have enough money to purchase it. (Jef Murray)

If the real hourly wage calculation is the problem, think of the pension/retirement check as stored life energy you earned in the past. Obviously the time and money costs of work in real time might not apply, but the concept is the same. (David A. Heitmiller)

To get an idea of what the real cost of a purchase is if you're not working for money, figure it on the basis of what your real hourly wage would be if you spent more than your retirement income and had to go back to work to make up the difference. (I'm talking about going back to work at whatever job you could actually get at your present stage/position in life.) (Dan Lugenbehl)

For some people the translation into real hourly wage is less useful than looking at their priorities. Rank your spending categories, looking for the top 5 or 10. Do they reflect the priorities you claim you have in life?

What about relative percentages? Is entertainment twice as important as giving to charity according to who I say I am? (Penny Yunuba)

What if a large portion of my income is from investments?

I like to think that the real hourly wage calculation is just a tool. It's not supposed to be accurate to the penny, unlike other parts of the program. So there isn't a hard and fast rule on figuring out hourly wages on investment income. Another twist is that unless you have fixed income investments such as treasuries, the amount of income will vary from month to month. So any wage calculation you make will have to either be approximate or recalculated often.

For investment income, I recommend you figure out how many hours per month you spend managing your investments, and use that to calculate an hourly wage. I like this approach because the number of hours is generally small and it correctly reflects that investment income is a good use of your time. It's also a reminder that everyone should spend some time every month consciously managing and thinking about their investments. (David Bogartz)

If I do counseling work for 5 - 10 hrs a week and have investment income, how do I figure my real hourly wage?

Since you have two sources of income, you should calculate two different hourly wages. The one for the counseling work is probably straightforward.

How do I combine two sources of income?

Generally I suggest averaging the two hourly wages, weighted by the number of hours per month. One problem with this method is that you will lose the information about the relative effectiveness of the two different income sources. If this information is important to you, you can do two separate life energy columns in your tabulation, one for each hourly wage. (David Bogartz)

Should I calculate based on net or gross?

You can do it on gross and count taxes as one of the costs of working (and then subtract them out). Or do it based on net, and add back in benefits, such as insurance, that you would otherwise buy and deducted savings or 401K plans. See directions on this in the current Money & Spirit Study Guide. (Vicki Robin)

What if I like the job I am doing and would do it (or part of it) for free?

Then do the job for free! Or get paid, and give the money away! Either it is done to earn money, or it isn't. "Part of it is done for money" is not an alternative answer because the object is to see the connection to your need for money. (Vicki Robin)

What if I love what I am doing?

If you were not doing it within the organization you work for, you would be freed from some of the parts of the job and job environment that limit your thinking. So you could reach your objective (like providing low-income housing) in a more creative manner and have a much greater impact than you could being part of some organization. (Vicki Robin)

Figuring out your real hourly wage is a wake-up call, not an accounting category. (Vicki Robin)

How do we calculate life energy when one person has a paid job and the other works in the home?

Here are some alternatives (in no order):

When calculating the real hourly wage for the paid job:

• First figure out the number of hours of child care given by the person at home.

• Then figure out the cost that would have been incurred if the child care had been purchased.

• Deduct this as a cost when calculating the real hourly wage for the paid job. (Clearly this could be repeated to reflect money saved for home cooked meals, etc. It depends on how much detail you like to get into and how important this recognition is to you as a couple or as individuals.)

Both people can use the real hourly wage for the paid job. (Reasoning: all work should be valued equally.)

When should I enter a credit card bill?

If you pay it in full, you can enter it when you are billed. Some people make a note of every purchase on a credit card to track their running total. (Vicki Robin)

There are a couple different ways to do this.

1. One way is to account for expenditures on the date that the money leaves your life, which is the way I do it. That means I track it when I write the check to the credit card company. The advantage is that it's dead simple. But it doesn't accurately reflect the date of the decision to spend the money. Also, for those who live from paycheck to paycheck, it's dangerous because you've spent this month's money even though it's still sitting there in your checking account where you could spend it again.

2. The other way to do this only really works if you are using Quicken. You can create an account for each credit card, and when you buy something with a card, debit it out of the credit card's account. Then you can do the bill payment as a transfer from your checking account to the credit card account. This makes the cash accounting work while still reflecting the correct date of the decision to spend the money because Quicken will report that the money was spent at the date of the purchase rather than the date of the bill payment. (David Bogartz)

If I do not pay my credit card in full each month, is there any relationship I can show for interest paid on items bought earlier or overdraws?

Everything is much harder if you don't pay the balance every month. (David Bogartz)

What books have tracking systems?

Following are books that explain different tracking systems:

• Your Money Or Your Life, by Joe Dominguez and Vicki Robin - Chapter 3

• Making The Most Of Your Money, by Jane Bryant Quinn - Chapter 8

• How To Get Out Of Debt, Stay Out Of Debt & Live Prosperously by Jerrold Mundis - Chapters 8 & 10