Today I visited The Death Clock – a website that estimates how much life we have left.  After giving it my gender, age, height, weight, and smoking status, it informed me that I have about 1.5 billion seconds left.  Try it; it is rather sobering, even if it lacks precision.

What does this have to do with personal finance?  Well… very much because it helps reveal how I think of money.

Defining Money

Money is rather dryly defined as, “a medium of exchange for the payment of debts.” To some, money is power.  To others it is a comfort or a source of security.  It has taken the form of precious metals, paper, and digital numbers in electronic accounts.  However, the best definition of money I have ever heard, and the reason for including a link to death clock is this:

“Money is something for which you trade your life energy.”

Think about it.  The majority of us get money by giving up part of our lives. You get up early, you spend time away from your family, you earn by the sweat of your brow, and the whole time your death clock is ticking down.  When you are young, and have energy to spare, it is wise to convert some of this excess into money, for as you age you have less energy to spare.  The unfortunate part is that it is a conversion, not a storehouse.  Life, once traded for money, cannot be changed back if you discover you have more than you need.  Our goal then should be to strike a balance: to convert sufficient life energy into the money needed for an enjoyable life, but as much as is possible, to spend our lives actually living.

Counting the Cost

In order to apply this principle, you first calculate your real hourly wage.  You will then see exactly how much your life energy is worth, and you will be able to measure the cost of money spent in terms of valuable life energy lost, instead of just dollars.  I find this is helpful when trying to learn to live more frugally.

Back in my article on using time well I blocked out how I spend my time.  I spend so many hours at work each week, but also spend a lot of time preparing for work and commuting… for which I am not paid.  Since my life energy is draining away during this time, it only makes sense to include that time in my workday.  A little division, and I have my real hourly wage.  Use this handy calculator to discover yours (it includes other variables that can be factored in.)

Once you have finished, you can do some eye-opening conversions.  For example:

How much life energy do you spend at convenience stores/restaurants daily?  Could you spend less and still be happy if you made your coffee and lunches at home?

How much life energy will it cost if you buy that new toy you are thinking about getting?  Is it something you know you will use, or are you simply shopping for the thrill of something new?

Matt has written several times about how much debt costs that also illustrate my point beautifully.  With your real hourly wage, you can now see how fast your debt is literally draining you of your life energy.  That knowledge should provide you with the strength to run from debt with gazelle intensity.

This is not to say that you should never spend money, but rather to find the point at which spending more brings no additional joy, then learn to say… “I have enough.”  It is impossible to truly enjoy financial success if you believe you still need, “just a bit more.”  This idea of a finish line will help protect us from spending so much of our lives accumulating things… things that we may not have enough life left to enjoy!

Try it yourself

First, go try out the DeathClock Calculator.  Then check out the real wage calculator to get your own numbers.  Then, next time you spend money ask yourself how many hours this purchase is costing you, and most importantly, if it is really worth it.  Then come back here and tell us about it.