Posted: 18 Sep 2011 01:00 PM PDT
Every Sunday, The Simple Dollar reviews a personal finance or other book of interest. Also available is a complete list of the hundreds of book reviews that have appeared on The Simple Dollar over the years.
The choice to be a stay-at-home parent.
The decision to continue to live in an area where you’re unhappy living just to chase good pay.
The impact of an expensive hobby or habit that we don’t want to give up.
Does money win? Or does life win? These types of decisions are the focus of Carmen Wong Ulrich’s The Real Cost of Living. The book is broken into sections focusing on specific areas of decisions that we have to make in our lives.
The Real Cost of Home
The Real Cost of Marriage and Divorce
The Real Cost of Family
The Real Cost of College
The Real Cost of Bad Habits
The Real Cost of Being Your Own Boss
The Real Cost of Credit Cards
The Real Cost of Saving
The Real Cost of Investing
It’s not a book that provides a “system” for you to follow or an overarching method for getting yourself into great financial shape. Instead, it’s more of a problem solving book, one that can help you think through a specific dilemma you might have in your life and your finances.
Posted: 18 Sep 2011 07:00 AM PDT
A few weeks ago, I was reading a yet-to-be-released personal finance book. At one point in the book, the author suggested that I make an actual list of my priorities. What is the most important thing in my life? What are the key things that follow it, and in what order?
After thinking about and editing the list a few times, my list looked something like this:
1. My marriage
I could keep going for a long time after this, but this is roughly what my list looked like.
The author offered up several thoughts about this priority list, but one thought kept running through my mind as I looked at this list of priorities that I’d made.
Every single significant problem in my life comes from situations in which I violate this list of priorities.
What do I mean by “violate”? I simply mean that I make a choice in which I take something of importance away from a higher priority and give it to a lower priority.
For example, if I were to stay up too late with some old friends and this causes me to sleep in too late the next day, missing something that my children wanted me to attend, I feel horrible.
Another example: if I spend too much money on my hobbies, it can impact something that I want to do in the future with my wife and children.
Yet another example: if I eat out (notice how this isn’t even on the list) too often, I won’t be able to afford a book I really want to read.
Now, one could take this to extremes and state that every action, by default, must support one’s highest priority. I don’t think that’s necessarily true at all.
Instead, it’s simply a call that I need to make sure that my higher priorities are covered before I do something involving a lower priority.
Is spending this evening with my friends going to keep me from doing something I need to do tomorrow with my wife, my children, or my spiritual life?
Is spending two hours kicked back and reading going to cause me to skip the exercise I need for my health?
Will this hobby purchase really provide enough for me to reduce the amount I can save toward our next family vacation or for the house my wife and I have always dreamed about?
Again, it comes back to a basic truth: every single significant problem in my life comes from situations in which I violate this list of priorities.
When I violate it with my money choices. With my time choices. With my attention choices.
What are your priorities? How do you handle things when something with a higher priority comes into conflict with something of a lower priority? What really wins? What’s really the priority in your life?
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