Your Money or Your Life

Financial Integrity Transforming Your Relationship with Money
The Financial Integrity Program Guide
The Financial Integrity Program Guide Version 1.4 (replacing and superceding all previous versions) was created and published in 2009 by The New Road Map Foundation Creative Commons Attribution Share-Alike 3.0 US License, some rights reserved. The New Road Map Foundation is a 501(c)3 nonprofit organization that supports people in transforming their relationship with money and aligning their economic choices with their values. Tax deductible contributions to support this work can be mailed to: PO Box 1363 Langley, WA, USA 98260 www.financialintegrity.org
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 United States License. This means you are welcome to use, distribute, and make adaptations and derivative works, with the following restrictions and attribution added to any work you use or create: This work is licensed under Creative Commons Attribution Share-Alike 3.0 US License. It is based on the Financial Integrity materials developed by the New Road Map Foundation, available for free at www.financialintegrity.org The enclosed NRM's Financial Integrity material is based on the original seminars Transforming Your Relationship with Money and Achieving Financial Independence, produced by New Road Map Foundation and performed by Joe Dominguez from 1984-1986. The nine-step program in this curriculum was later also detailed in Your Money or Your Life (Penguin Books, 1992 & 1999) by Joe Dominguez and Vicki Robin. In no way does NRM here imply a grant of use to any material written under any title other than Financial Integrity, nor material that was previously published under private copyright with rights reserved.
THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 2
Acknowledgements
These materials were developed out of the collective energy of so very many people, over so very many decades too many to name them all. Still, we would like to acknowledge those who have been involved over the past three years since the call was made to take the money work into the new century Monica Wood not only edited this Program Guide, but has been the calm, centering force behind this work since meeting Joe Dominguez back in 1960. The Financial Integrity project would not have happened at all, if not for the courageous and generous spirit of Vicki Robin. The volunteers with the NRM Speakers Bureau and Financial Integrity Associates (FIA) were the inspiration for this project: Dave Wampler was the incredibly patient cajoler, who insisted the work be reborn. Alan Seid was the captain who steered the project through the shoals and Heather Johnson helped see through the occasional fog. Ann Haebig, Fred Ecks, Michael Stradley and Jane Dwinell were the task masters, ensuring not only the integrity of this particular material, but its universality. Monique Tilford, Kevin Cornwell, Penny Yunuba, Lu Bauer, Liesbeth Trappenburg, Cecilia Finnigan, Mike & Linda Lenich, Linda Farris, Jacque Blix, David Heitmiller, Suzanne Ballantyne, Joseph Beckenbach, Jane Zeender, Tom Calloway, and Pam & Jonathan Allen played important roles at crucial times over the course of the new incarnation, as well as in the old heyday. Rhoda Walter and the rest of the original NRM system sisters were ever a reminder of how an inspired and inspiring team can work wonders. Special thanks to instigators of the aha moment: Carolyn Hilles, and Aileen Krush who asked at just the right time, Is there a curriculum for teaching the nine-step program? And of course the worker bees: Katharine Wismer, Cultivate Marketing, Giodarno Kearfott Design, and especially the indefatigable Anne M. Jess. (Because sometimes its okay to bring in the pros for help). Extra special thanks to Rozie Hughes, Queen Bee (and Chief Bottle Washer), who was not only blessed with this vision of how to bring the FI work into the new century and into The Commons, but made it happen and saw it through.
Ask Yourself These Questions
Are you comfortable with the amount of money you have? Is it enough?
Yes
No
Are you spending as much time with family and friends as you would like?
Yes
No
Do you come home from your job feeling fulfilled?
Yes
No
Do you have time to participate in things you believe are worthwhile?
Yes
No
If you were laid off from your job, would you see it as a tragedy or an opportunity?
Yes
No
Do you have enough savings to support you through six months of normal living expenses?
Yes
No
When you think about your finances, do you feel peaceful and at ease?
Yes
No
If you were to die in the next few years, would you be comfortable with your legacy or contribution to your family, your community, the world?
Yes
No
Are all the aspects of your life your job, your possessions, your relationships, your values integrated? Do they fit together?
Yes
No
If you answered 'No' to even one of these questions, you are in the right place!
Table of Contents
Welcome!......................................................................................................................................... 6 Introduction .................................................................................................................................... 13 Step 1 How Much Money Has Come into Your Life? And What Do You Have to Show for It? .... 26 Step 2 Being in the Present: Tracking Your Life Energy ............................................................... 40 Step 3 Where Is It All Going? Monthly Tabulation......................................................................... 55 Step 4 Three Questions that Will Transform Your Life.................................................................. 66 Step 5 Making Your Life Energy Visibile: Your Wall Chart............................................................ 76 Step 6 Respecting Your Life Energy: Minimizing Spending.......................................................... 83 Step 7 Respecting Your Life Energy: Maximizing Income ............................................................ 95 Step 8 Capital and the Crossover Point ...................................................................................... 107 Step 9 Securing Your Financial Independence ........................................................................... 120 Congratulations!........................................................................................................................... 129
WELCOME!
You are about to begin an exciting journey of exploration, learning and personal change. So many people find money the lack of it, the worry about it, the time spent making it, or the guilt associated with having it to be an obstacle to happiness. Money often becomes the cause (or excuse) for people not living their dreams or exploring what their life could really mean. The Financial Integrity Program helps you eliminate those obstacles. It teaches you to use money as a tool to get the life you want. It coaches you to act with intelligence, integrity, and independence in relation to money and the economic pressures we all face. This program WORKS because it includes down-to-earth fiscal practices, infused with a radical approach that will change your perspective on money. When applied whole-heartedly, it can transform not just your wallet but your life. Joe Dominguez developed the program in the 1960s, His education went from the slums of New York to the offices of Wall Street. Along the way he developed practical hands-on steps to integrate timeless financial wisdom into everyday life. Joe Dominguez retired at the age of 31, never again to take money for his labors. Together with Vicki Robin, Monica Wood, and a cohort of other volunteer-philanthropists, he founded the New Road Map Foundation in 1984, to more formally help spread the word about this effective, transformative approach to money. Joe died in 1997, but his program lives on. Until now this program did not have an official name, though hundreds of thousands know about this nine-step program through the seminar and audio course Transforming Your Relationship with Money (by Joe Dominguez) and the bestselling book Your Money or Your Life (by Joe Dominguez and Vicki Robin). We named it The Financial Integrity Program because 30 years has shown that people have most valued the sense of INTEGRITY the program brings to their lives. Ultimately, the program is simply a toolbox for you to build a healthy relationship with money that will bring you peace of mind. The only requirement for success on your part is diligence and honesty and doing the steps. So, welcome! And congratulations on starting a journey that will change your life! New Road Map Foundation Seattle, 2008
What Is Financial Integrity?

Some people define integrity as the quality or condition of being whole having substantial or enduring character congruity, alignment, integration
What comes to mind when you hear that a building has structural integrity? You might imagine the building to be safe, strong and secure it will hold together well and serve the inhabitants for a long time, thus fulfilling its purpose. Financial integrity is much the same it implies strength, security and honesty when it comes to money. It means walking your talk, and it involves making wise choices to achieve purposeful, reliable and beneficial ends. Here are a few comments from people who have worked with the Financial Integrity program: I got out of a great deal of consumer debt, tripled my retirement savings, and built an emergency fund. For the first time in my life, I know for sure that I am consistently living below my means and I'm prepared for unpredictable expenses. It gave me a new way of looking at the relationship between time and money. I found I value time much more than money and I found out what "enough" was for me. Invaluable. I stumbled across [the program] six years ago and found miracle all my feelings and ideas understood and shared While doing the steps I found out that I was financially independent already but it is not the end of the journey, it is the beginning. Now I know why people who win a large sum in a lottery very seldom remain wealthy. Its because they have never learned [financial integrity.] I quit my paid job last year at the age of 40. First (in 1992) success meant being financially independent. Seemed totally impossible when we started out our wall chart now shows independence around next spring (2008). Success is still evolving, but at the moment it means stronger relationships, more time, making more change for our definition of better, and more freedom. It also means that a possession will never again take precedence over the successes above. Our possessions only exist to serve the above.
Financial Integrity Will Help You

The Financial Integrity (FI) Program is a method to help you create a healthy, empowering relationship with money, allowing you to get beyond money concerns and get on with LIFE. There are many positive outcomes from this program. FI can help you: Reduce stress around money. Have more clarity about money. Feel more in control and empowered about money. Get out of debt faster than you thought possible. Live within your means and develop savings. Get to the point where you can choose the type of work you do. Reconnect with a greater meaning and purpose in your life. Have more time for the activities and people that are important to you. Experience more fulfillment in your life.
Which of these are relevant to you?
The Financial Integrity Program

The Financial Integrity (FI) program involves nine distinct hands-on practices. While we refer to them as the nine steps, they are not like steps in a ladder; they dont lead you up to some mythical realm of riches where, once you arrive, you can let the ladder drop and forget how you got there! What they do accomplish is to integrate timeless financial wisdom into daily decisions and actions. These steps are actually skills and mindfulness practices that can serve you for the rest of your life. These practices are a bit like parts of a DNA spiral they are the building blocks of a contented life. They are interconnected and interdependent, each one important to the whole. How you put them together is up to you. Even if you do only one of the steps, we guarantee you will get something out of it. But why stop with just one? Just as all the spokes of a wheel are important to moving forward smoothly, so it is with the steps. When you give equal weight to ALL the steps, in their appropriate order, you can go to amazing places very quickly. And when you discover how well they work, you will move through them over and over again.
The Nine Steps A Quick Overview

Step 1 How much money has come into your life, and what do you have to show for it? in order to move forward in a new way, its important to figure out how you got where you are. Calculate your lifetime incomeestimate and create a personal balance sheet.
Step 2
Being in the present: Tracking your life energy. Build an understanding of what this money stuff is worth in relation to YOUR life. Calculate your real hourly wage -- the current monetary value of your time and energy. Become aware of all your financial transactions and their real cost.
Step 3
Wheres it all going: Monthly tabulation. Observe your current habits and needs around money. Keep a monthly record of your spending patterns and how they affect your bottom line.
Step 4
Three questions that will transform your life. Create a foundation for making the changes you want to make. Evaluate your spending based on your own satisfaction, values and goals.
Step 5
Make it visible: Your wall chart. Look at your progress and the positive affects as you make changes.Track your progress monthly in order to stay motivated for long-term goals.
Step 6
Respecting your life energy: Minimizing spending. Naturally reduce expenses by applying a new approach to spending that reflects maximum fulfillment for your life as a whole.
Step 7
Respecting your life energy: Maximizing income. Naturally increase income, in alignment with your health and integrity, by recognizing your time as a precious, limited resource.
Step 8
Capital and the cross-over point. Set a goal enough and then some. Invest your savings to receive income regardless of employment status, and estimate the time of financial independence.
Step 9
Securing your financial independence. Take personal responsibility for your future and become knowledgeable, sophisticated and adept about investment vehicles within your own self-defined criteria.
The Financial Integrity Program Guide Structure

Each Step of the Financial Integrity Program includes these components: Overview Preparation Preview How It Works Case Studies A brief description of the purpose and objectives of the step. Required materials and pre-step exercises. A quick preview of the step actions. Concepts, actions and practices of the step. Throughout the program guide, we follow two people as they move through the steps. These two reflect some of the different situations people face as they work with this program, as well as the varied approaches people have taken in doing the steps. For real-life stories and tips, go to the FI web site, www.financialintegrity.org. The key points of the Step, and a chance to deepen your learning and integrate your experiences. Follow-up advice and activities to strengthen your process.
Review & Reflection
Tips for Success
Tips for Success

People who have been successful with this program suggest: Create a convenient place for your personal FI materials. For example, you could store your papers and worksheets in a 3-ring binder, or create a special directory/folder on your computer. Be open to new ideas. Pay attention to yourself when you feel resistance. Notice what those moments teach you about yourself. Customize the practices to fit your life, while keeping to the intent of each step. Be patient with yourself and others. Change can be harder than staying with the status quo. Keep a journal of your thoughts along the way. Watch how your responses and reactions to each step evolve, as you repeat the steps over time. Find community and other resources for support and camaraderie. Check out the resources found on the Financial Integrity web site www.financialintegrity.org.
INTRODUCTION
Transforming Your Relationship With Money
When we talk about having a relationship with money, we mean your general approach to your economic activities how you earn money and how you spend it, save it or give it away and the thoughts and feelings associated with those activities. Many people dont feel in control of their relationship with money, because either they dont understand how it developed or they never even thought about other ways of relating to money. Your own approach may have made sense at one point, but now you are unsatisfied. This program is about paying close attention to your usual approach to money, rethinking it, and then building a new relationship that truly fits your life. In this chapter, well explore a typical relationship with money and begin taking a fresh look at the purpose of money.
The Nine Circles Exercise

Try this exercise. Connect all nine circles with three straight lines, without lifting your pen or pencil off the paper. You can do this in your head or on this page.
If you find this exercise challenging, try thinking outside the box. Still stumped? Check the end of this chapter for the solution.
Thinking Outside the Box

Thinking outside the box involves questioning the norms that we follow how we usually operate. Do these norms really make sense? Do they really work for me? We all make assumptions which our culture, more often than not, supports. As with the ninecircles exercise: Sometimes we make assumptions by putting something there that isnt really there such as a box around the circles. Sometimes, we make assumptions by limiting our view and overlooking something that is right there in front of us such as assuming the circles are dots without dimensions.
We do the same thing with money: Some people believe money, in and of itself, equals happiness, while others think money is evil. We make up ideas around money, just like we see a box around the circles. Some people think theyll never have enough money. Such thoughts and beliefs limit our view so that we dont see opportunities that are right in front of us.
So how do we start seeing things as they really are? For starters, by being willing to question your assumptions around money, as well as your cultures messages about money, and investigating what is really true for YOU.
The Fulfillment Curve

Does money make us happy? Most of us never received any specific education about money. We humans learn at an early age by mimicking others. In this way we adopted certain beliefs around money when we were children beliefs that may or may not serve us well. We need to examine those beliefs and assumptions in order to weed out what no longer is working. We usually spend money trying to make our lives better or happier in some way. When were hungry we might spend money, perhaps on a piece of fruit, and feel good. We might spend even more money buying food for a holiday feast and feel even better. If we want to chart this dynamic we might set up a graph like the following:
(Feast $50)
(Fruit $.50)
This is one way to represent the relationship between the amount of money we spend (horizontal axis) and the amount of satisfaction or fulfillment we feel as a result (vertical axis). When a line is drawn to represent the overall trend in how money spent relates to fulfillment, we call the diagram the Fulfillment Curve. Lets use this model to take a closer look at how a typical relationship with money develops.
Survival
When we were little babies, it didnt take a lot to make us happy. We learned a particular way to gain satisfaction: when we were uncomfortable we cried, and something came to take care of us. We cried when we were hungry, and we were fed. Our needs were filled. Our minds recorded these experiences and remembered the message: Fulfillment comes from outside of us. As we got older we had to start filling some of those needs for ourselves, and we learned to use money rather than crying to get what we needed. When we got out of school, we got a job to pay for food, clothes, and a place to sleep. We got satisfaction from taking care of ourselves, getting jobs to earn the money that paid for those necessities. We spent money and we were fed, warmed, and sheltered. And we learned: money = fulfillment.
This diagram shows that, on the level of basic necessities, a little money can bring a LOT of satisfaction.
Comforts
When we go from buying necessities (things that keep us safe and healthy) to buying comforts (things that make life comfortable and nice), our belief in the positive relationship between money and fulfillment gets even stronger. We have a coat to keep us warm, but for a little more money we can have a coat that is also fashionable, in the latest style. Were able to feed ourselves, but for more money we can eat at a restaurant (where someone else does the dishes). More money spent, more fulfillment. We begin to take basic survival needs for granted, and our definition of success shifts. And the notion of more money = more fulfillment is further embedded.
This diagram shows that the more money we spend for things that make life more comfortable, the more fulfillment we feel. We have developed a belief around money, which is largely unconscious the more money we spend, the more happy and satisfied well feel. More is better.
Luxuries
Eventually, anyone can spend beyond comforts to outright luxuries and hardly register the change. For example, a car is a luxury that most people in the world never enjoy. But most of us who own cars think that wed be happier if we just had a newer car or even a second car. Or wed be happier if we had a bigger house, or a vacation home, or a cruise to Hawai or .. Such luxuries cost more than comforts and MUCH more than basic necessities, so we have to keep acquiring more money in order to buy them. By now we firmly believe that money equals fulfillment, so we barely notice that its taking more and more money for smaller and smaller amounts of fulfillment and the fulfillment doesnt last. On we go with our life, acquiring and spending, hoping it will make us feel good, feel worthy, feel fulfilled. But the thrill is gone.
This diagram indicates that fulfillment is not nearly proportional to the amount of money spent on luxuries the curve is starting to level out.
Clutter
One day we hit a fulfillment ceiling and it looks like more is not better after all but were hooked. The formula money = fulfillment has not only stopped working but has started to work against us; our possessions have become burdens. Each new thing we buy costs us more time and energy: to learn how to use it, maintain it, accessorize it, store it, fix it, and pay interest on the payments for it. Theres more to lose (and for others to envy) so we spend more money on security and protection resulting in the need to make MORE money! But spending that money doesnt bring us the fulfillment it once did; it just brings a sense of burden or futility. Everything after the peak of the Fulfillment Curve is excess. We call it clutter.
The formula stopped working; our possessions have become clutter; and from now on, its down hill all the way. Could the belief that money = fulfillment be wrong?
Recognizing Enough
Why doesn't money = fulfillment work any more? A dynamic in economics called the law of diminishing returns has to do with natural limits. Another way to think of natural limits is ENOUGH-ness. Think of it in terms of a cake: the first bite is delicious, and the second and third. It tastes good, the sugar kicks in, you feel happy, and your stomach is full. But if you keep eating after youre full, you get a bellyache; youve had too much, and happiness fades fast! There's a very interesting place on our Fulfillment Curve the peak. This point of maximum fulfillment is a key to happiness and a healthy relationship with money, and each of us must identify it for ourselves. We call that peak ENOUGH. Its not always easy to recognize enough. Cultural pressures around money and family and social norms can get in the way. Advertising tries to make sure that we always want more on the material level, that we always experience yearning and dissatisfaction with what we have, and that we think spending more money will solve our problems spending more and more, until our lives are over or all our money is gone.
The Power of Enough

How do we know when we have ENOUGH? When we have everything we need, but nothing in excess. We have enough for our survival, for our comforts, and even for a few luxuries; we feel satisfied, and there's nothing in excess to burden us or complicate our lives. Enough is appreciating and enjoying what money has brought us but not buying anything that we dont really want or need; feeling pleasantly full of money without that constant yearning for more. Enough is place of power and freedom a launching point for cultivating the kind of fulfillment that money can't buy. We can go from a relationship with money that revolves around fretting and consuming to one that is oriented around creating and giving. That peak we strive for is a dynamic place. Maximum fulfillment comes from learning to recognize that feeling of enough and adjusting our actions accordingly. It takes certain skills and qualities to reach enough to recognize when youve reached enough to stay near that peak of the Fulfillment Curve, without falling back into deprivation or down into gluttony.
The next nine chapters will provide you with the tools you need to build those skills and create the conditions for maximum fulfillment.
Your Relationship with Money

Now that youve seen what a relationship with money can look like take a few moments to think about your relationship with money. How would you rate your current relationship with money? (Check one) Very comfortable (solid, consistent, dependable, free from worry, little or no time devoted to acquiring and managing it) Comfortable (pleasant, easy, few worries, an acceptable amount of time devoted to acquiring and managing it) Neutral (normal, an average amount of time devoted to acquiring and managing it) Bad (clouded with persistent feelings of fear, worry, deprivation, hopelessness; no matter how much time devoted to acquiring and managing it, its never enough)
What are your current feelings about money? (Fill in the blanks) Fill in the blanks using Items you spend money on (such as clothing, books, gifts) and Feelings (such as guilty, virtuous, angry, joyful, worried, and so on). For example: When I spend money on new shoes, I feel happy. When I spend money on convenience foods I feel guilty. When I spend money on _______________I feel ______________. When I spend money on _______________I feel ______________. When I spend money on _______________I feel ______________. When I spend money on _______________I feel ______________. When I spend money on _______________I feel ______________. When I spend money on _______________I feel ______________.
Review and Reflection

Its useful to evaluate our beliefs around money to see if they really serve us. To get a fresh perspective and create room for change, its important to think outside the box of custom and habit. Does your relationship with money help you feel happy, or does it seem to get in the way? Enough is a free place, full of appreciation for what money brings into our lives. What would enough feel like for you? What would be different? What decisions have you made consciously or unconsciously that created your current financial situation? Would you make the same choices again?
Tips for Success

Spend some time writing down your earliest impressions about money. How do they affect your approach to money now? Look at some of your possessions. Notice how you felt about them when they were new. You might chart your reactions, based on fulfillment and money spent. Think about them now are they necessities, comforts, luxuries or clutter? What did you think at the time you bought them?
The Nine Circles Exercise Solution
STEP 1
HOW MUCH MONEY HAS COME INTO YOUR LIFE? AND WHAT DO YOU HAVE TO SHOW FOR IT?
Step 1: Lifetime Income & Personal Balance Sheet
Step 1 Overview
This step is about taking a clear, honest look at your current financial situation and how you got there. This is an important step in orienting yourself toward positive change. In this chapter youll review your earning history and get an idea of how much money has come into your life. Then youll then take a look at how youve managed it, reviewing what you own and what you owe (assets and liabilities) in order to get an accurate picture of your finances today. Getting clear with the past prepares you to come into the present. In Step 1 you will create two tools for your journey to enough: Your Lifetime Income Estimate Your Personal Balance Sheet
Step 1 Preparation
Step 1 is the most involved step in terms of gathering data. The more accurate you are in doing this, the more clarity you will get about your current situation. To get the most out of Step 1 it will be helpful to: Locate your Social Security Administration (SSA) Statement of Earnings. The SSA sends out these statements annually. If you dont have a recent copy you can visit your local SSA office or go to their website to request one.Your SSA statement lists your reported income since you started working. Recall or gather records of money received that is not reflected in your SSA Statement. Find out the current balances on your bank accounts, loans and other debts. (Check your statements, call your bank). Get an idea of the current value of your house, car and other valuable possessions. Refer to the Financial Integrity web site for additional resources (www.financialintegrity.org).
Step 1 Preview Part A. Estimate Your Lifetime Income

Lifetime Income Worksheet
Financial Sources Taxed income (SSA report) Untaxed jobs Selling stuff (cars, CDs) Allowance/spending money Gifts Interest on savings Total Lifetime Income (Estimate) Amount $ $ $ $ $ $ $
Part B. Create a Personal Balance Sheet

Personal Balance Sheet
OWN Liquid Assets Cash on hand Bank Accounts Investments Hard Assets (+) Cash Value $ $ $ (+) Cash Value $ $ $ $_________ Total Owe $_________ Liabilities Car loan School loans Mortgage Credit Cards Personal Loan OWE (-) Cash Value $ $ $ $ $
House Vehicles Personal items

Total Own
Personal Financial Net Worth: Assets Liabilities = $_______
Step 1 How It Works Part A: Determine Your Lifetime Income

How much money have you earned in your lifetime? How much money other than earnings has come into your life? Lifetime income includes both reported and nonreported income. You can find out your reported income from the government. US citizens can get that information from the Social Security Administration. Non-reported income is money, other than taxed wages, that has come into your life. Much of that is undocumented so you will have to remember and estimate. You can go back through your memory year by year, ask family members, and look at your bank statements for deposits. Why explore your income history? This process is empowering; it will remind you that you can bring money into your life. Your income history, along with your Personal Balance Sheet in Part B, will help you realize just how youve stewarded that money. If you have made very little money over the years, it will help you recognize how resourceful youve been in living on less.

Financial Sources Amount $ $ $ $ $ $ $ $ Total Lifetime Income (Estimate) $
Case Study: Jamie Lifetime Income Worksheet Jamie is 28 years old, single, living in an apartment, a house painter by trade, and has been working full-time for ten years.
Jamies Lifetime Income

Financial Sources Reported Income (SSA report) Savings bonds from Uncle Joe Work for Uncle Joe (unreported) Sold my piano Sold my old car Birthday gifts over the years Total Lifetime Income Amount $300,560 $20,000 $1,500 $700 $1,200 $400 $324,360
Case Study: Chris Lifetime Income Worksheet Chris is 40 years old, married with two children, and owns a house and a vacation cabin. Chris has been working for 15 years as a hospital administrator. Chris spent six years as a full-time student. For two of those years, when Chris spouse Jessie was carrying all the financial responsibilities, Chris decided to record an estimate of value received, based on the estimated value of half the household expenses at that time.
Chris Lifetime Income

Financial Sources Reported Income (SSA report) Tutoring in college (unreported) Inheritance & scholarships Allowance in high school ($25/week) Jessie covered expenses for 2 years (est. of the household bills) Net from sale of first home Interest income on savings (estimate!) Total Lifetime Income Amount $1,050,861 $1,200 $20,000 $5,200 $20,000 $20,000 $1,560 $1,118,821
Part B. Create a Personal Balance Sheet

To create a new map to your future you need a starting point an awareness of where you are, financially, right now. Your Personal Balance Sheet will serve as the You Are Here spot, as you chart a course into the future. A balance sheet of assets and liabilities is a fundamental business practice. Treating yourself as a business will help you get an accurate, objective view of your current financial situation. A Personal Balance Sheet is a snapshot of a moment in time; it is based on things that change regularly, like bank account and loan balances. If you have easy access to your balances, you can pick todays date for your snapshot. Otherwise, pick a date in the near past for which you have all your records in hand.

OWN Liquid Assets (+) Cash Value $ $ $ Hard Assets (+) Cash Value $ $ $ Total Own $_________ Total Owe $_________ Personal Financial Net Worth: Assets Liabilities = $_______ Identify and Record Your Assets Your assets the money and things you have accumulated over the years are an important part of your financial picture. Of course, you are more than just the things you own. You are a person with skills, talents and education. You have personal relationships, social connections and business networks. We call these intangible assets those valued aspects of yourself that cannot possibly be assigned a monetary value. As these intangibles come to mind, you might want to keep a separate list of them as a reminder of your non-material assets. These things will be useful to remember when we get to Steps 6 and 7. For now, we will focus on your financial assets things with a specific cash value or things you could convert to cash if necessary. Financial assets can be broken up into two categories. Well call them money (liquid assets) and stuff (hard assets). Liabilities OWE (-) Cash Value $ $ $ $ $
Your Liquid Assets Money Liquid Assets are cash and those items you could easily convert to cash in hand if needed. Use values from the beginning of the month. Liquid assets include: Cash on hand Bank accounts: checking, savings, money market, certificates of deposit Savings bonds
Case Study: Jamies Liquid Assets
Liquid Assets Pocket cash Checking account Savings account Savings bonds Security deposit (apartment) Total Liquid
(+) Cash Value $52.37 $1,200.00 $6,750.00 $20,000.00 $500.00 $28,502.37
Case Study: Chris Liquid Assets Chris is married and shares assets with a spouse. For the purposes of this exercise, Chris has decided to record half of each asset shared by the household, since Chris lives in a community property state that assumes spouses share equally.
Liquid Assets Cash on hand Checking account Money Markey account Total Liquid
Chris share () Liquid
(+) Cash Value $71 $7,800 $25,000 $32,871

$16,436
Your Hard Assets Stuff You have assets that are physical in nature, sometimes called hard assets. These are items you own and use, which youre not as likely to turn into cash. They include such things as furniture, vehicles and jewelry. One way to start listing your hard assets is to begin with the biggest, most valuable items you own, and then work your way down through less valuable items as you inventory your possessions. But keep in mind that all those little items (like tools or clothes) can add up. Check online and local resources for ideas on pricing your possessions. Estimate a realistic value, which probably is not the retail price of the same item brand-new. When deciding how detailed to get, remember the purpose of this step: figuring out what you have to show for the money youve received! Yes, this could take a while, but there are many benefits to documenting your financial situation besides just having the clarity of an accurate balance sheet such as: You can update your insurance, documenting what you own so you can get full value in case you have to make a claim. You know how much money you could obtain if you need extra cash. You know how much you are leaving to your family in a case of untimely death, so they wont have to figure out your estate in their bereavement.
Case Study: Jamies List of Stuff
Hard Assets
Truck Furniture Music equipment/instruments Tools Bike Clothes, coats Books/CDs Other items Total Hard Assets
(+) Cash Value 15,000.00 970.00 3,900.00 750.00 1,000.00 250.00 920.00 500.00 $ 23,290
Case Study: Chris List of Stuff Chris did an inventory and estimated real-market value based on some research online:
Houses Home Cabin Subtotal Vehicles Cars Motor boat Trailer Subtotal Antiques Round table & chairs Hutch/armoire China/Silver Oriental rugs Subtotal Jewelry/Clothes necklaces rings, jewelry leather jackets Subtotal $325,000 $75,000 $400,000 $45,000 $20,000 $3,000 $68,000 $400 $500 $400 $1,200 $2,500 $1,000 $1,000 $1,500 $3,500 Furniture 2 couches and 3 chairs, coffee table, lamps, end tables, book cases 2 queen beds, 2 twins, 1 king bed 4 bureaus, 8 night stands Lamps Subtotal Kitchen appliances Power tools Laundry appliances Subtotal Game room Pool table Stereo TV and equip Subtotal Sports Equipment All-terrain vehicles Skis, ski equipment Subtotal $5,000 $1,000 $360 $100 $6,460 $500 $300 $200 $1,000 $600 $400 $2,400 $3,400 $200 $300 $500
Tools & Appliances
.
Hard Assets
Houses Vehicles Antiques, Jewelry,Clothes Furniture Tools, Appliances Game room, sports equipment
Total Hard $485, 360 Chris share ()
(+) Cash Value 400,000 68,000 6,000 6,460 1,000 3,900

$242,680
Identify and Record Your Liabilities A financial liability is a debt, an amount you owe to another person, business or institution (such as, a bank). This includes mortgages and personal loans, credit-card balances, school loans, car loans and other debts. Calculate your total liabilities by adding up what you owed on the same date that you calculated your liquid asset balance. Case Study: Jamies Liabilities Jamies finances are simple on the liabilities side: the only debt is $5000 for the balance of the truck loan. Case Study: Chris Liabilities
OWE Liabilities Long-term Debt College loan balance Mortgage balance (house) Mortgage balance (lake cabin)
Total $455,000 Chris share ()
(-) Value 105,000 295,979 50,000

227,500
Liabilities Short-term Debt Car loan balance Visa Cards Mastercard Personal loan from Dad
Total $62,552 Chris share ()
(-) Value 40,000 8,752 9,800 4,000

31,276
While all debt is simply money you owe, some people, like Chris, make a distinction between longterm debt that was used to buy assets that may increase in value (like houses or education) versus short-term or revolving debt (like credit cards, or debt for things like cars that may lose value before you are even done paying them off). This distinction can help you prioritize what debt to pay off first, but it is not necessary for Step 1.
Calculate Your Net Worth A balance sheet is a worksheet that compares what you owe with what you own to come up with a figure called net worth a statement of your current financial situation. To create a balance sheet, add up all your assets on the left side of a page, add all your liabilities on the right side, and then subtract your liabilities from your assets. This is your net worth what you have to show for your lifetime income. Case Study: Jamies Balance Sheet
Jamies Personal Balance Sheet

OWN Liquid Assets Pocket cash Checking account Savings account Savings bonds Security deposit (apartment)
Total Liquid Hard Assets
OWE (+) Cash Value $52.37 $1,200.00 $6,750.00 $20,000.00 $500.00

$28,502.37
Liabilities
Truck loan
(-) Cash Value $ 5000.00
Truck Furniture Music equipment/instruments Tools Bike Clothes, coats Books/CDs Other items Total Hard
Total Own
(+) Cash Value 15,000.00 970.00 3,900.00 750.00 1,000.00 250.00 920.00 500.00 $ 23,290.00
$51,792.37
Total Owe
$ 5000.00
Personal Financial Net Worth: Assets Liabilities = $46,792.37
Case Study: Chris Personal Balance Sheet
Chris Personal Balance Sheet OWN

Liquid Assets Cash on hand Checking account Money Markey account Total Liquid $32,871Chris share () Liquid Hard Assets Houses Vehicles Antiques, Jewelry,Clothes Furniture Tools, Appliances Game room, sports equipment Total Hard $485, 360 Chris share () Total Own (+) Value $71 $7,800 $25,000 $16,436
OWE
Liabilities Long-term Debt College loan balance Mortgage balance (house) Mortgage balance (lake cabin) Total $450,979 Chris share () Liabilities Short-term Debt Car loan balance Visa Cards Mastercard Personal loan from Dad Total $62,552 Chris share () (-) Value 105,000 295,979 50,000 225,490
(+)Value 400,000 68,000 6,000 6,460 1,100 3,900 $242,680
(-) Value 40,000 8,752 9,800 4,000 31,276
Total Owe Personal Financial Net Worth: Assets Liabilities = $2,300
$259,066
$256,766
Emotional Impact Step 1 can result in some Aha! moments of pride or dismay! (Notice, for example, Chris low financial net worth relative to an impressive lifetime income). There is a full range of feelings that could come up in doing these steps. Whatever comes up for you is OK. This is about exploration. Youre not here to judge the past just to see and accept it so you can move on. Some people even find they have a negative net worth. Thats when its good to remember your lifetime income figure and reflect on how your automatic assumptions about money may have led you to this situation and how a different approach going forward might create dramatic change in the future. The remaining eight steps will help you chart a new course. SEE and ACCEPT the current reality. UNDERSTAND the effect of the choices youve made. TAKE RESPONSIBILITY for creating a fulfilling future!
Step 1 Review and Reflection

Your Lifetime Income Estimate shows how much money has flowed into your life. Your Personal Balance Sheet indicates how much of that value you've retained your net worth. A snapshot of your current financial reality helps you objectively assess your situation. This is an important reality check in setting a course for your future. Debts even those associated with assets decrease your net worth. You have many intangible assets, not shown in your financial net worth. What was your reaction to the Life Income activity? Did anything surprise you? How did it feel to learn how much money you've earned, and then to look at your net worth? What conclusions did you reach? What decisions have you made consciously or unconsciously that created your current financial situation? Would you make the same choices again?
Step 1 Tips for Success

Update your Balance Sheet at least every year (some people do it monthly) it's what successful businesses do to make sure they're on the right track, and your success is no less important. Keep a journal of your thoughts along the way and outline reasonable, incremental goals for the future. Remember that shame and blame don't accomplish anything but bad feelings. Keep your focus on walking into the future with a positive attitude. Make a list of your intangible assets and reflect on how you can use them to add to your quality of life.
STEP 2
BEING IN THE PRESENT: TRACKING YOUR LIFE ENERGY
Step 2: Real Hourly Wage & Tracking
Step 2 Overview
In Step 1 you calculated how much money youve earned in your life, looked at how youve stewarded that money and created a Personal Balance Sheet. Getting clear with your past has prepared you to come into the present where you will look at the specifics of money in your daily life. In this chapter youll start to take a closer look at the way money moves in and out of your life, day in and day out. You will also take a look at what money is and develop a realitybased definition of money that helps you see what it really means to YOUR life. After completing this chapter you will be able to: Calculate your REAL hourly wage (RHW). Translate dollars spent into a meaningful measure: the time it took you to earn those dollars. We call this your life energy. Create a method for recording your daily money transactions. We call it tracking your life energy.
Step 2 Preparation
Make a list of time expenses (hours spent commuting, making brown-bag lunches, shopping for clothes, non-paid overtime, and other) that are associated with your job. Make a list of things you have to pay for out of your pocket in order to maintain your job (work clothes, commuting costs, child-care, lunches, and so on). Before you continue, consider these questions: What is your definition of money? What is the first thought that comes to mind? Look at your lifetime earnings work in Step 1 and ascertain how much of that money came from paid employment as opposed to other income streams?
Step 2 Preview Part A. Calculate Your Real Hourly Wage

An accurate, reality-based and useful definition of money is based on how much every dollar actually costs you in terms of the time needed to earn it. Once you know your real hourly wage, you will know how much life energy you are exchanging for each dollar you spend. Real Hourly Wage (RHW) = Adjusted income Adjusted job hours Adjusted Income is: wages/salary plus value of job benefits received minus the expenses you have because you work (gas or transit fares, income taxes, work clothes, and others) Adjusted job hours is: actual amount of time spent on the job plus the time you spend on activities necessary to maintain the job (the hours spent commuting to work, shopping for clothes for the job, doing background research at home, and so on) Establish the real value of your dollars one dollar = ______ minutes of your Life Energy
Part B. Track the Daily Flow of Money in Your Life

Keep track of every cent that flows into or out of your life, every day. EVERY cent, EVERY day.
Money: What is it?

Money makes me feel loved. Money buys happiness!
Ive got money! Im powerful!
Defining Money: We Need a Definition of Money that Is Useful Some meanings often given to money: o o o o o o Money is security. Money is dirty. Money is power. Money is a necessary evil. Money is a tool of political repression. Money is happiness.
People project their own emotional meanings onto money. These might include happiness, status, self-esteem, acceptance, respect, exploitation, love, freedom, and so on. We may not actually define money by the meanings we attach to it, but we ACT as if money were these things. What Does Money Mean to You? What are your first memories around money? What were you taught about it? What did money mean to you growing up and now? Do you feel differently about money having completed the exercises in Step 1? Before continuing, take a few moments to jot down some of your own thoughts about what money means to you:
Means of Exchange? Classic economic theory tells us that money is a means of exchange. But this is true only within a society that shares that agreement. If you were to be in the desert with a huntergatherer culture, your money would have no exchange value. We need to find a definition that is not only consistently true but is also real in our lives that has personal and useful relevance in our lives. Just WHAT is the nature of the exchange we are making? In this program we define money as something for which you exchange your life energy the hours of your life. Consider these ideas: We spend our life energy in hours on the job in exchange for money. Anyone with a salaried or hourly job (like Jamie and Chris) fits this description. ~ or ~ We support someone else (who earns money) with our life energy, thereby allowing money to come into our life. (Chris spouse works part-time in order to watch the kids after school, while Chris trades for this time by carrying more of the family expenses). ~ or ~ We spend our life energy managing our investments, in exchange for increased dividends or value. Anyone who manages a portfolio or real-estate property fits this description. (Both Jamie and Chris do this eventually, as well see in Steps 8 and 9).
No matter how we acquire money, we spend some amount of time (life energy) to get it. The amount of life energy may not be the same in every instance, but it is universally true that life energy was traded for money.
Money = something we trade our life energy for

Every dollar you spend is equal to the amount of your life energy it took to get it. An hour of your life is precious, because its limited. Once its gone you can never get it back. When you spend money you are spending your life energy, your time. So the question is:
How much of your life are you trading for your money?
Step 2 How It Works Part A: Calculate Your Real Hourly Wage

The point of spending your time making money is to make money! Get realistic how much money are you REALLY receiving for the time youre putting in? The fact is, employment costs you and sometimes its a lot more than just your time. So its important to know your REAL hourly wage not what your paycheck says, not the one you think youre worth.
You want to know the real return on your investment of time.

Once you know that, you can figure out just how much life energy youre exchanging for every dollar you make (and spend). There are some hidden and not-so-hidden tangible costs and benefits of working. On the next few pages, we will explore those in more depth. Work-Related Benefits Jobs often offer benefits to employees. As part of the real hourly wage calculation, you need to include as income the value of the benefits you receive. You can make your calculation based on an average month or an average year. With certain benefits, it may be easier to do these calculations based on annual amounts. Find out what these benefits would cost you if you didnt have a job and you wanted to purchase these things yourself. (This information will also come in handy when we get to Step 8). If you wouldnt purchase that benefit on your own, dont bother including it. Case Study: Chris Work-Related Benefits
Chris List of Work-Related Benefits

Annual Monetary Benefits: Retirement account match Subtotal Monetary Benefits Other Benefits: (Id have to purchase privately) Health Insurance for family Dental insurance Long-term care insurance Life insurance Subtotal Other Benefits Total Benefits $ 10,220 $ 696 $ 685 $ 350 $ 11,951 $ 16,601 $ 4,650 $ 4,650
Work-Related Expenses Jobs also have costs to employees. Some of these are obvious, such as commuting costs. Others are not so obvious. Were not dealing here with the intangibles of wrecked relationships or neglected house maintenance; were only counting what is measurable. Case Study: Jamies Work-Related Expenses
Jamies List of Work-Related Expenses (per Month)

Work travel 20 miles/day @25 gal/mile Coffee at work Work clothes Work supplies/tools Monthly Expense Total Work-Related Time Your time is valuable. How much time are you spending on your job and job-related activities? You can calculate this on a weekly, monthly or annual basis. How many hours do you really spend on your job? Case Study: Chris Work-Related Time -$ 60.00 -$ 15.75 -$ 26.67 -$ 30.00 -$ 132.42
Chris List of Work-Related Time (per Year)

10 hour days + every other Saturday 8 hours (minus holidays, 1 month vacation) Commute Reading medical journals & publications Physical therapy (stress related injury) Exercising at the gym Shopping for work clothes Annual Time Total 2,608 (400) 230 104 24 138 12 2,716
Calculate Your Real Hourly Wage (RHW) Heres a simplified example to see how this works; the figures are arbitrary. Lets say you have an annual salary of $30,000 and work 50 weeks a year. Weekly earnings: Weekly work time: Hourly wage (600 40 = 15) : BUT . What about job-related expenses that you have to pay for? These expenses must be subtracted from your salary. What about job-related activities beyond your 40 hours on the job? These hours must be added to your work time. Weekly Earnings Salary Taxes Commute Clothes Lunches Childcare Adjusted Salary: Weekly Work-Time Time on job Commute Dress/Prep Work at home Decompress Adjusted Work-Time: Real Hourly Wage Weekly earnings, adjusted: Weekly work time, adjusted: Hourly wage, adjusted: Not $600 40 hrs = $15/hr But.... $300 60 hrs = $5/hr Real hourly wage: $5 per hour How much a dollar costs: 12 minutes Do you see that your nominal salary and real hourly wage may be quite different? $300/week 60 hours $5 ($300 60 hrs = $5) 40 hours plus 5 plus 5 plus 5 plus 5 60 hours $600 (based on $30,000/yr) minus $125 minus $ 50 minus $ 25 minus $ 25 minus $ 75 $300 $600 40 hours $15 /hour
Case Study: Jamies Real Hourly Wage Calculation
Jamies RHW Calculation

Caculated on an Annual Basis Basic Job Adjustments Payroll taxes Work travel Coffee at work Work clothes ($320/yr) Work supplies/tools Subtotal Adjustments Real Hourly Wage -$212.16 -$60.00 -$15.75 -$26.67 -$30.00 -$344.58 $2,428.76 + 0.50 + 26.75 194.80 = $12.47 + 21.00 + 5.25 $/Month $2,773.34 Hours/Month 168.00 = $/Hour $16.51
My Life Energy I trade an hour of my life energy for about $12.50. Every dollar I spend represents 5 minutes of my life energy.
Case Study: Chris Real Hourly Wage Calculation Although Chris has a high salary as a hospital administrator and gets a lot of benefits, there is one hefty work-related expense care for two children. Paying a professional for child-care would cost about $18,400 per year. However, Chris spouse Jessie decided to down-shift to doing part-time free-lance work at home and to watch the kids after school. For Chris RHW, child-care is calculated at $30/hour the net amount Jessie would be bringing in to the family if those hours were spent earning income for the family.
Chris RHW Calculation

Caculated on an Annual Basis Salary (nominally $48.08/hr) Income Retirement account match Monetary adjustment Work-related benefits value, if purchased privately Insurance (whole family) Dental insurance Long-term care insurance Life insurance Total Income: Taxes Clothes & shoes Auto: gas (60 miles, 25 mpg, 284 trips/year) Gym near hospital Physical therapy-stress related (insurance deductible) stay-at-home parent $/Year $ 100,000 + $ 4,650 + $ 12,000 + 696 + 685 + 350 $ 113,731 -$ 23,703 -1,200 -2,045 -780 -500 -20,700 $ 69,453 hours/year 2,208 230 104 24 138 12 2,716 $25.57
Work-related expenses
Adjusted Income:
Work-related time expenses
10-hour days + every other Saturday time off Commute Reading medical journals & publications Physical therapy Gym Shopping for work clothes
Total Time: $69,453 2716 hours = Real Hourly Wage Every $25 spent represents one hour spent working.
Part B: Track Your Life Energy

Once youve calculated your real hourly wage, you know how much of your life energy youre exchanging for every dollar you spend. Money might start to take on a different kind of importance. Where is it all going? Now youre going to set up a system to record every dollar that flows into and out of your life. A commitment to doing this tracking brings clarity and accountability to your relationship with money. Why record every dollar? To know where your money is really going. To establish habits of accountability. To respect the correlation between your money and your life energy. And because It all adds up! For example, if your real hourly wage is $9.78 per hour you know that: Every time you buy a fancy pastry at a bakery caf ($3.25), you are trading about 20 minutes of your life energy for that goodie. There are as many different systems for tracking as there are people. Devise a system that fits for you. Here are a few of the ways people track their money: Pay with checks that have a duplicate and jot notes for cash purchases in the check register. Collect receipts for all your purchases and jot notes on the receipts. Pay for everything with debit cards and download your transactions weekly into personal finance software or spreadsheets. Keep a pad of paper or an index card in your purse or pocket and write down all cash amounts you spend and receive.
KEEP YOUR EYES ON THE PRIZE: Will you capture every cent with your system, whatever it is? Probably not, but the point is to try to become as aware as possible of what is really happening with your money your precious life energy. If you do miss several transactions, just start again as soon as you realize that youve lapsed. Remember, this is for YOUR benefit.
Case Study: Jamies Tracking Log a pocket notebook list
Jamies Pocket Notebook

January Day 1 Income Coffee Gas Paycheck Truck insurance Rent Coffee Cat food Coffee Coffee Movie & snacks Coffee Snacks/beer for poker Poker winnings New boots Groceries Concert Electric bill Telephone bill Expenses 0.75 35.00 84.00 500.00 0.75 12.15 0.75 0.75 10.00 0.75 12.75 4.50 110.99 75.82 40.00 35.50 65.75
1,386.67
Day 2 Day 3 Day 4 Day 5
Day 6
Day 7
Multi-Person Households
If you live with others, following this program will probably involve some discussion and negotiation. Some people ask their whole household to track, since most things are shared. Some people in families track only their personal expenses and record a percentage of shared costs as their own personal expenses. Remember that this program aims to increase your peace of mind, not create more conflict in your life! Creative problem-solving can help everyone benefit from your effort. (See the FI web site www.financialintegrity.org for other stories on this subject). Case Study: Chris Tracking downloads bank card transactions from online banking Chris realized that it would be most meaningful to track the whole household, since everything is shared. But Chris spouse does most of the household purchasing, and he was resistant to saving receipts. They agreed on a tracking system that involves using bank cards and checks rather than cash, and Chris downloads transactions weekly from the bank into personal finance software.
Chris Transaction Download Report

Date Account 1/1/08 Cking at Natl Bank 1/1/08 Cking at Natl Bank 1/1/08 Cking at Natl Bank 1/2/08 Cking at Natl Bank 1/3/08 Cking at Natl Bank 1/3/08 Cking at Natl Bank 1/4/08 Cking at Natl Bank 1/4/08 Cking at Natl Bank 1/4/08 Cking at Natl Bank 1/7/08 Cking at Natl Bank 1/1/08 CC at Fed Bank 1/2/08 CC at Fed Bank 1/2/08 CC at Fed Bank 1/1/08 1/7/2008 Num Description Opening Balance Municipal Hospital Melange NCMC 7-ELEVEN M. Flynn Pie Palace Hank's Harvest Glover Street AFSC Rei 11 Physical Therapy Internet Provider Category Income Restaurant Mortgage Pmt Auto: Gas Dog Sitter Restaurant Groceries Groceries Charity Kids Gear Medical Utilities:Internet Amount 7,800.00 3,125.00 -6.99 -2,090.46 -37.24 -100 -32 -235.17 -135.38 -25.00 -324.52 -25.00 -24.95 8,513.63
3888
3862
Tracking It All Adds Up!

These are just two examples of tracking the daily flow of money. Find the way that works best for your life and your habits, but do enter every bit of income and every expense, no matter how small! This is the basis for all the progress that will be made in the next seven steps. Its important to know exactly what you are doing with your money, and tracking gives you that data. Why every cent? Because it all adds up! As you will learn in Steps 3 and 4, combining your real hourly wage calculation with your tracking will help you make rational, wise decisions about your money your life energy. In the steps that follow you will use your tracking information to: Eliminate expenses that arent worth the life energy they cost. Spend your life energy where it brings most fulfillment.

You exchange your time (life energy) for money. How does the definition Money = Life Energy affect the way you look at money and the role it plays in your life? Employment (having a job) has both benefits and costs. How do you feel about your real hourly wage calculation? How do you feel about tracking every cent in your daily life? What challenges or opportunities do you think you will encounter? How does the question Are you getting your times worth? feel different from Are you getting your moneys worth?

Consider ways to decrease work-related expenses, so as to increase your real hourly wage. As you make financial transactions, think about the amount of money, received or spent, in terms of the TIME it represents. Before making a purchase try asking yourself, Will I get my times worth? Adjust your tracking system as needed to fit your personality and habits, but do keep recording and summarizing expenses and income each month. It can take a while to find a system that feels comfortable for you. (See Appendix to find resources and stories about tracking). If youve stopped tracking for whatever reason, just start again whenever you notice youve lapsed. Ask yourself why you stopped, and address whatever issue your answer brings out.
STEP 3
WHERE IS IT ALL GOING? MONTHLY TABULATION
Step 3: Monthly Tabulation
Step 3 Overview
In the previous two steps youve taken a look at your finances, past and present, and have started to track the daily flow of money in your life. In Step 3 you will use the information gathered in tracking to see what patterns are emerging. You will establish your own spending categories and create a monthly summary or tabulation of your expenses and income. This is different from a budget, with its arbitrary estimates of future spending. A monthly tabulation shows what you are actually doing with your money in the present and provides an accurate portrait of your lifestyle and spending patterns. The practices of Steps 2 and 3 form a foundation for Step 4, where you will learn how to evaluate those patterns with an eye to increasing your fulfillment.
Step 3 Preparation
Before you continue, reflect on these questions: What are your reasons for wanting to do this financial program? What are your goals? What questions do you ask yourself before purchasing something? What practices (budgets, envelopes, spending restrictions, or other ways) have you tried in the past to help manage your finances? What were your experiences and feelings with those? How much time do you spend monthly on managing your personal finances? Include trips to the bank, online banking, prioritizing and paying bills, meetings with a financial advisor or tax accountant, and so on.
Step 3 Preview Create Your Monthly Tabulation

Monthly Tabulation
Month/Year: __________ Actual Starting Balance Income Wages Interest Other Total Income Expenses Rent Utilities Groceries And so on ... Total Expenses Ending Balance Actual Starting Balance + Income Expenses Actual Ending Balance (at the end of the month) Unaccounted for (Difference between Ending Balance and Actual Ending Balance) Dollars $ ____ Hours of Life Energy These instructions will apply if you are doing your tabulation on paper or spreadsheet. If you are using software or online banking, you may be able to download your data directly into your tabulation. On the first day of the month, add your cash on hand plus current balances of your liquid accounts to find Actual Starting Balance. List all your categories. At end of month, enter category amounts. Add to get Total Income and Total Expenses. Calculate your Ending Balance: Actual Starting Balance plus Income minus Expenses. This is what you should have at the end of the month. At the end of the month, add cash on hand plus current balances of liquid accounts to find your Actual Ending Balance. In each category, calculate Hours of Life Energy Spent: Expense Real Hourly Wage
$_____
$_____
$_____
$_____
$_____
How well did you track? At the end of the month, compare your Ending Balance with your Actual Ending Balance caculation. The difference is the total of transactions you may have missed. Next month, see if you can make that amount smaller or even zero!
Step 3 How It Works Part A: Search Out Patterns

Now that you have been keeping track of the daily flow of money in your life, you may begin to notice some patterns in your spending. As you look at your record of expenses, notice which ones occur daily (like your morning cup of coffee), which weekly (that class at the gym) and which only monthly (rent). Predictable expense categories include housing, clothing, transportation and food but its more useful to create categories and subcategories that reflect the uniqueness of your own life and help you identify your own financial patterns. Case Study: Jamies Patterns Jamie doesnt care about the different types of leisure activities, but does want to get a handle on the amount spent on general entertainment each month.
Jamies Notebook
January ~~~ 01/02 01/17 01/20 01/22 theater concert movie & popcorn books ~~~ $24.00 $35.00 $15.60 $14.95 Income Expenses
These can all be grouped as $89.55 in the Entertainment category for January. Categorizing your expenses puts your financial transactions into a meaningful picture that brings greater clarity into your relationship with money. Categories and Subcategories When grouping your expenses, create categories that are meaningful to you, depending on your patterns and interests. If you want to pay particular attention to certain areas of your life, create subcategories to gather more information. For example, if you want to become aware of how much you eat on the run, you could subdivide your Food category into subcategories of Meals out and Groceries. If you are downloading transactions using online banking, the bank may choose your categories for you. Similarly, personal finance software often starts you out with standardized categories. Dont just accept those categories change them according to what has meaning to YOU.
Case Study: Chris Household Groceries Subcategories Chris and Jessie want to know if the family is eating a healthful diet, so even though they generally download their transaction information, they keep receipts for the month to create a grocery breakdown.
Chris Transactions
January 01/04 01/10 01/18 01/25 01/31 ~~~ Grocery & supplies Grocery & supplies Grocery & supplies Grocery & supplies Grocery & supplies ~~~ Income Expenses $ 357 $ 310 $ 289 $ 316 $ 269
Chris can recategorize (using receipts) into their own defined subcategories: Meal foods __$925 Junk/snack food__$463 House supplies __$154 Dont worry if you dont discover all your categories right away. You can always add or change them as you go along. Take a look at your tracking information. How can you group or categorize your expenses and income? Are there areas where you want to pay particular attention? Areas where you want to be more aware of your money-related behaviors?
Part B: Track Debt

Credit-card fees and interest charges should have their own category. These are the costs of using the credit card, not specific items purchased. Similarly, if you are paying down a debt, such as a mortgage or loan, it is important to separate interest expenses from principal payments. Remember your personal balance sheet? Paying off principal decreases your liabilities (yay!), while interest and other fees that represent the cost of borrowing money are just money spent and gone. Also separate out expenses like homeowners insurance and property taxes. Case Study: Chris Debt-related Categories Chris has many different types of debt and would like to start decreasing that burden. So Chris family tabulation is broken down in a way that helps them evaluate how the various types of debt are affecting household finances, as well as track how much debt principal is paid off each month.
Chris Monthly Debt

Debt Costs Interest: Car Loan 1 Interest: Car Loan 2 Interest: Credit Card Interest: Loan Payment Interest: Mortgage Cabin Interest: Mortgage House Subtotal Debt Cost Principal Principal: Car Loan 1 Principal: Car Loan 2 Principal: Credit Card Principal: Loan Payment Principal: Mortgage Cabin Principal: Mortgage House Subtotal Principal 237.50 203.64 124.83 84.51 54.88 200.00 $905.34 32.03 11.99 26.18 21.60 105.50 605.23 $801.43
Part C: Discover Your Gazingus Pins

What things do you particularly like to buy, and buy often? What items are so hard to resist that you just cant pass them by? Everyone has them For some people its ceramic figurines; for others its pens. For some people its shoes; for others its earrings. For some its sports memorabilia; for others its electronic gadgets. We call these gazingus pins. They are those things you buy automatically, because its a habit, or because they make you feel a certain way. You can create categories to track gazingus pins and to monitor when you make unconscious choices out of emotion or habit. How Do You Know if Something Is a Gazingus Pin? Ask these questions: Do I/we need this? Do I/we really want it? Where would this item be on the fulfillment curve (survival, comfort, luxury, clutter) when I first buy it? Where would this item be in another month? Two months? A year?
Case Study: Jamies Gazingus Pins Jamie loves music and enjoys playing music with friends. In reflecting on the monthly tabulations, Jamie noticed that in months when more time was spent working (and less time playing with friends), more money was spent buying music CDs. Buying music was like a consolation prize for not being able to do what was really more enjoyable.
Jamies Notebook
Income 02/21 02/28 03/07 03/11 ~~~ cd cds ~~~ cds cd ~~~ Expenses $ 18.59 $ 38.21 $ 21.75 $12.95
What Are Your Gazingus Pins? How does each one make you feel? Remember to keep an open mind one persons gazingus pin may be anothers treasure.
Tracking vs. Budgeting

When people try to follow a budget, they typically feel constrained and limited in their choices by pre-set standardized categories. When you set up a budget you may be making assumptions; you may have preconceived notions about what your categories should be. For example, someone who grew up in a household where money was tight might put strict spending limits in certain categories because they were told as a child, Thats not a good use of money. So, money comes in, and the budget tells you how to spend it. If you break the budget for whatever reason, there may be emotional consequences: you might feel guilty for breaking the rules, or take money from another category to cover your indiscretion. You might feel deprived, constrained or out of control. On the other hand, you might find you are under budget and so you go out and buy more stuff just because Its okay, I havent gone over my budget. Daily Tracking Helps you become more aware of yourself and your relationship with money. Monthly Tabulation Helps you see your patterns and helps you make informed choices.
Tracking your expenses, in contrast, does NOT mean depriving yourself. The point is to use your monthly tabulation to build awareness in handling money. When you see a money pattern that makes you feel uncomfortable, ask yourself, Why do I do that? and the next time youre about to make that kind of purchase, you remember to think twice and reevaluate. Tracking your income helps you pay attention to the various ways money comes into your life and how you feel about each way. The purpose of tracking your money on a daily basis is to become more aware to observe and learn about yourself and your relationship with money. Creating a monthly tabulation helps you to see your patterns in a more concrete way and informs your choices as you move forward.
Part D: Translate Your Categories into Life Energy

In Step 2, you calculated the REAL value of a dollar based on your real hourly wage how many hours you work for every dollar you spend. Now you can apply this knowledge to your categories. After all, the category totals are describing what you do with your life energy, your time!
Money Spent Real Hourly Wage = Hours of Life Energy Spent
This is the beginning of a reality-based evaluation of your patterns How many hours of life energy are you spending in each category? What does this say about how you are spending your life?
Now, the tabulation starts to have real meaning, because it is linking your money to the rest of your life.
Case Study: Jamies Monthly Tabulation (paper ledger) From Step 2, Jamies Real Hourly Wage (RHW) = $12.47/hour. Here, Jamies Hours of Life Energy are listed in the column to the right of the income and expense amounts. At the end of the month, there is a small discrepency between the actual amounts and the tracked amounts.
Jamies Monthly Tabulation

Month/Year: January Actual Starting Balance Income Wages Poker winnings Interest Total Income Expenses Work-related Clothes Work-related Supplies Work-related gas (410 mi@21 mpg) Rent Utilities Phone Groceries Coffee Restaurant meals Cat food Supplies Apt. Truck insurance Truck loan principal Truck loan interest Truck maintenance Truck gas (less work-related) Music Entertainment Poker losses Total Expenses Ending Balance (Actual Starting Balance + Income Expenses) Actual Ending Balance Unaccounted for Ending Balance vs. Actual Ending Balance Dollars $1,845.00 Hrs Life Energy
2,773.34 10.50 5.63 $2,789.47
222.4 .8 .5 223.7
110.99 20.19 60.00 500.00 35.50 65.75 335.67 16.50 160.00 24.30 32.00 84.00 300.00 175.00 30.00 145.00 184.00 16.50 5.75 2,301.15 2,333.32 2,362.37 29.05
8.9 4.6 4.8 40.1 2.8 5.3 26.9 1.3 12.8 1.9 2.6 6.7 24.1 14.0 2.4 11.6 14.8 1.3 .5 184.5
2.3

Your categories (income and expense) reflect your life choices, not someone elses. What kind of information do you want to get from your categories? What categories are appropriate to break down in more detail? Tracking expenses is not about deprivation its about building awareness. If you have used a budget in the past, how has tracking your expenses compared with budgeting both in practice and in how you feel? Your money flow represents what youre doing with your life energy. How do you feel when you translate your expense totals into hours of life energy? Did any category totals surprise you?

Adjust your tracking and tabulation systems as needed to fit your personality and habits, but do keep tracking and summarizing each month. It might take a while to find a system that feels comfortable for you. Be flexible when working with household members it can take time for others to understand the benefits of tracking and tabulation and to find a system that takes everyones personalities and habits into account. Create categories that are meaningful to you and your life. Change them when appropriate for your goals. Make notes in your journal about your insights, feelings and observations as you track your life energy. Learn about the variety of methods people use for their tracking and monthly tabulations. See the Financial Integrity website for more ideas.
STEP 4
THREE QUESTIONS THAT WILL TRANSFORM YOUR LIFE
Step 4: The Three Questions
Step 4 Overview
Steps 1 through 3 have helped you paint an accurate picture of your financial life both where you are and what youre doing there. In Step 4 you will learn a method of evaluating how you earn and spend money and if it aligns with what you want to do and be in your life. Youll achieve this by reviewing your monthly categories in the context of three life-changing questions: 1. Did I receive fulfillment in proportion to life energy spent? 2. Was this in alignment with my values, goals and purpose? 3. How would this change if I didnt have to work for a living? Using the fulfillment curve as a model (see Introduction), these questions will help you adjust your current behavior so as to achieve maximum fulfillment in relation to money.
Step 4 Preparation
Before you continue, do the following activities: Recall and write down your original reasons for wanting to change your relationship with money. Collect your monthly tabulation sheets. Calculate the hours of life energy expended for each months categories (Step 3)..
Step 4 Preview The Three Questions

Monthly Tabulation
Hours of Life Energy Q1 Fulfillment? Q2 Alignment? Q3 Financially Independent?
Month/Year: Actual Beginning Income Wages Interest Total Income Expenses Rent Utilities ~~ (sample symbols) Total Expenses Month End Actual End Unaccounted(Difference)
Dollars $ ____
$_____
$_____ $_____ $_____ $_____
Add three columns, one for each Question, to your Monthly Tabulation. At then end of the month, ask the Three Questions for each category: 1. Did I receive fulfillment in proportion to life energy spent? 2. Was this in alignment with my values, goals and purpose? For Questions 1 and 2, use a symbol to indicate your feelings. Some people use a check mark or smiley face. Use whatever is meaningful to you. 3. How would this change if I didnt have to work for a living (that is, if I were financially independent)? For Question 3, use a symbol to indicate how your spending would change. For example, + and indicate more spending, while - and indicate less spending. It doesnt matter what symbols you use as indicators use whatever is easy for you to understand and to remember.
Creating a Whole Life

In Step 3 you translated money into the hours of life energy it cost you to get it. This helped you define the real value of money for you. Knowing the real, tangible impact (in hours) of a dollar in your life helps to make the question Is it worth it to me? a little easier to answer. Every time you spend money, think of how much of your time youre handing over. This helps you use your life energy in ways that are truly satisfying. But good decisions involve more than just the equation money = life energy. There are three questions you can use to bring a holistic clarity true integrity to decisions about your life energy.
Step 4 Is the Heart of the FI Program
In this step you will link your expenditures to the bigger picture of who you want to be and what you want to do in your life as a whole. Dont worry if you dont know right now what that looks like. Simply by asking yourself these three questions each month, as you review your monthly tabulation, you will naturally start to: Develop a clearer picture of what brings you true joy and satisfaction your fulfillment Know what feels right to you your values Develop a picture of what you want your life to look like in the future your life goals or purpose Know what its like to be in charge of your life this is the foundation of financial independence
Lets take a closer look at the three questions.
Step 4 How It Works Question 1: Did I receive fulfillment in proportion to life energy spent?
Remember the fulfillment curve? When you think about individual expenses, its easier to see that money spent on things you enjoy makes you feel good, while some other expenses make you feel not-so-good. When you view your overall categories with an eye to fulfillment, youre looking at the general pattern over the entire month: Did spending that amount of life energy on ______ bring you more or less happiness, contentment, joy, satisfaction .? Considering how much of your (limited) life energy you spent to earn that amount of money, do you think that purchase served you well? If the answers are YES Well, youre on the right track OK!! If the answers are NO Just notice it, without judgment. You may want to make some adjustments next month. Will you want to spend more in this category, or less? Fulfillment isnt the only factor to consider, however. Some items may cost a lot now, but bring you great results in the future. Other things are cheap now, but will cost you much more in the long run. And that leads us to the next question
Question 2: Was this in alignment with my values, goals and purpose?

Have you ever tried to steer a grocery cart with misaligned wheels? You have a clear goal of moving down the aisle, youre firmly steering the cart and pushing it along, but the cart moves you AWAY from your goal, not toward it. On the other hand, your cart may work perfectly but you forgot your grocery list and are wandering down the aisle trying to remember why you came; that isnt getting you where you want to go either! In order to achieve something effectively whether its a full grocery cart or a fulfilling life purpose and action must be in alignment to get the results you want. Some people have a hard time identifying their personal values, goals, and life purpose. But every action does indeed have some purpose. Why Are You Doing What Youre Doing? If you look deeply, youll find that every action reflects what you value or what you want to create in your life. Sometimes the answer to these types of questions just doesnt feel like the whole truth. It may be what we get, but its not really what we want. Looking deeply at how you use money can help you identify the motives and values behind your behavior. Case Study: Jamies Friday Night Poker Games When considering the costs associated with weekly poker games with her work-mates, Question 2 prompted Jamie to ask, Whats so important about poker? The question revealed that its not the activity that Jamie values its the camaraderie, the chance to develop friendships with her coworkers. As you will see later, this led to an interesting outcome when Jamie went on to answer the third question
Question 3: How would this change if I didnt have to work for a living?
A job doesnt just earn income. A job often costs you and in money as well as your time. You may have recognized this in Step 2 when you calculated your real hourly wage. For example, childcare can cost more per hour than a working parent earns. Office workers often join gyms because they have developed health problems from sitting all day. Home businesses usually increase home energy costs. When looking at your financial life as a whole, you cant ignore the impact of employment. But, what if a job wasnt in the picture at all? Question 2 helps you to clarify why you trade your money; Question 3 helps to clarify why you trade your time. Is your job aligned with your goal to have a clear, stress-free relationship with money? Do you take your identity from your job? When you can step back and know that you are not your job, it gives you space to evaluate your current employment. If your job is leading you to spend more money than you otherwise would, perhaps its time to look for other solutions. Chances are your job is a means to the goal of financial independence, by which we mean having enough and a little extra. We also talk about financial independence as having an income sufficient for your needs from a source other than your job. So once you achieve that goal, what would your life look like? Would you quit your job? Would you continue to work, but on your own terms? If so, what would those terms be? Envision What your day would be like if you didnt NEED paid employment How your spending would be different What you would choose to do with your time
Case Study: Chris Tabulation with Questions
Chris Monthly Tabulation

Month/Year: Income: Chris Pay Expenses Auto: Gas Auto: Maintenance Charity Child Care Dining Dog Food Dog Sitter Entertainment Gifts Groceries & Household Insurance: Cars Kids Activities Kids Gear Medical & Health Utilities: Internet Utilities: Phone Utilities: Gas & Electric Interest: Car Loan 1 Interest: Car Loan 2 Interest: Credit Card Interest: Loan Payment Interest: Mortgage Cabin Interest: Mortgage House Principal: Car Loan 1 Principal: Car Loan 2 Principal: Credit Card Principal: Loan Payment Principal: Mortgage Cabin Principal: Mortgage House Adjustments: Child Care (Jessie) Total Expenses Net Income (Savings) Dollars Hours of Life Energy Q1 Q2 Q3
4,320.83 208.04 329.52 12.50 40.00 63.87 76.00 50.00 76.00 24.10 649.11 58.33 17.50 162.26 140.00 12.48 65.33 31.16 32.03 11.99 25.18 21.50 105.50 605.23 237.50 203.64 124.83 84.51 54.88 200.00 1,410.00 5,132.95 (812.11)
168.98 8.14 12.89 0.49 1.56 2.50 2.97 1.96 2.97 0.94 25.39 2.28 0.68 6.35 5.48 0.49 2.55 1.22 1.25 0.47 0.98 0.84 4.13 23.67 9.29 7.96 4.88 3.30 2.15 7.82 55.14 200.74 (31.76)
Because Chris has a high value on helping others, she decided to work in health care. The debts she and her husband amassed for her education and family expenses pushed her to work in a high-paying administrative job. However, in looking at her monthly tabulation Chris realized that the costs of her job are high in terms of both money and family life. Asking Question 3 helped Chris to realize that their family expenses would be much lower if she wasnt working at such a time-consuming and stressful job. That got Chris dreaming ... If I wasnt doing this for money, would this job be how Id want to help people?
Case Study: Jamies Three Questions Here is an excerpt from Jamies tabulation, where discretionary spending is tracked.
Jamies Three Questions

Dollars Hours of Life Energy Q1 Fulfillment? Q2 Alignment? Q3 Financially Independent? $ ok ok
~~ Music Entertainment Poker losses ~~
$184.00 $16.50 $5.75
13.42 1.20 0.42
$ ok ok
ok ok ok
Jamie is a musician at heart and paints houses in order to pay the bills. So although Jamie spends quite a lot of life energy purchasing recordings, instruments and concert tickets, the fulfillment level is so high that Jamie would like to spend MORE money (symbolized by $) in that category. If Jamie was at the peak of the fulfillment curve and financially independent, she would probably be spending even more money traveling to shows, buying different instruments and studying with master musicians. Notice also the poker losses, as referred to in a previous example. Jamie decided that not only was it worthwhile (Question 1) to spend that time with her co-workers, but that her value on friendship led her to want such activities (Question 2) to continue, even if Jamie stopped working (Question 3).

Tracking and evaluating your expenses leads to more awareness and knowledge, thus increasing your options. This results in more satisfying choices not deprivation. All activity (and all purchases) happens for a purpose it reflects some value and/or achieves some goal. Did this step reveal anything new about your values, goals or life purpose? Aligning your actions with your values and purpose increases the chances for success and fulfillment. Jobs can cost you more than just your time. Its useful to recognize whether or not your job is improving your financial situation. What questions do you ask yourself before buying something? What was it like before you started tracking and evaluating your expenses? And since?

Continue to track your expenses and evaluate your categories with these three questions. Make a conscious effort to ask the three questions before making purchases and note your reactions. There are many ways of creating a monthly tabulation you can arrange it differently, use different symbols or other marks that make sense to you. The important point is to ask yourself the three questions EVERY month, for EVERY category, and use this reflection exercise to determine what kinds of choices you want to make in the future. Imagine not buying anything in a way that adds debt expenses (interest, finance charges) to your tabulation. How would your buying patterns have to change? Take some time to envision, in detail, what your life could be like when you have financial independence. What does it reveal about your values?
STEP 5 MAKING YOUR LIFE ENERGY VISIBILE:

YOUR WALL CHART
Step 5: Wall Chart
Step 5 Overview
In this chapter youll be creating a visual tool to show how money flows in and out of your life over time a monthly wall chart of your financial progress. As you post your monthly expenses and income over time, the chart will show you not only a picture of your current financial situation, but also the trend of your progress. This is an effective feedback tool that can inspire, encourage and help you become more conscious of how your daily actions affect your financial progress.
Step 5 Preparation
Before you continue, look at your monthly tabulation and answer these questions: What are your financial goals? How do you get feedback about your progress toward these goals? What percentage of your income goes toward paying debts on credit cards (principal and interest), loans, mortgages? Circle one 0-5% 6-24% 25-49% 50-74% 75-99% 100%
If you didnt have a credit card, what expenses do you think you would not be able to cover? How does asking yourself Question 1 (fulfillment in proportion to life energy) affect your approach to earning and spending? How does asking yourself Question 2 (alignment with values, goals and purpose) affect your approach to earning and spending? How does asking yourself Question 3 (financial independence) affect the way you think about your current work situation?
Step 5 Preview Create Your Wall Chart

Wall Chart
Income(blue) and Expens (red) es
1400 1200
For hand-made charts get a big piece of graph paper (10 squares to the centimeter or inch is fine) that is at least 18 x 22. The vertical axis represents money. On the left-hand side of your chart create a scale in dollar amounts, so your first monthly income and expense figures fall in the middle of the range. The horizontal axis represents time. Across the bottom of the chart write months/years, starting now and going through at least 5 years.
M 1000 o n 800 e y 600

400 200 0 m ar
apr
m ay
jun
jul
aug
sep
oct
Months
At the end of each month, enter your total monthly expenses on the chart, putting a dot by the dollar amount. Draw a line from the previous months mark. Plot your income in the same way, using a different color. Post your chart so you can SEE IT EVERY DAY. Optional: Plot your debt and saving balances in different colors, or on a separate chart, so you can see them change over time..
Step 5 How It Works

In Step 4 you began evaluating your expense categories by asking the three questions. Over time these questions will help you be increasingly aware of your spending and your level of fulfillment and alignment for each category. These questions will help you naturally modify your spending level in a way that brings maximum fulfillment and alignment. Similarly, your income level may also start to show some changes. Your income and expenses represent hours of your life energy. In this step you will begin to see your life energy in a visual way, by plotting your monthly income and expenses on a big wall chart. In this way you can SEE a visual picture of your life energy in action, over time. As you decrease your spending, you will SEE your progress on the chart which serves to motivate you even more.
W Chart all
Incom (blue) and Expenses (pink) e
1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0 my a ag u ju n ar p sp e ju l mr a
M o n e y
nv o
M onths
Some people choose to create their wall chart by hand. Others do it on the computer, either using spreadsheet functions or finding a personal finance program that has charting capabilities. However you create your chart, keep it in a place where you can see it every day. People who have been successful in this program maintain their wall charts for years. Why not? Its a great reminder of whats working for them. A wall chart is like a map, a picture of where youve been and where youre heading. You add onto this map every month as you plot your latest expenses and income. Even if you think you know where you are, its good to have that visual reality-check of your financial life. Real life rarely progresses in predictable increments, so the wall chart helps you to recognize the longterm trends and see progress despite individual months that may seem rocky. It can be a powerful motivator and a real reminder for celebration. In Step 8 you will learn to use your wall chart to help you forecast your financial future.
my a
dc e
fe b
ja n
ot c
mr a
ar p
Dealing with Debt

What kinds of debt do you have? Most people carry a certain amount of debt if they have purchased a home or other major investment. These days, many people have also accumulated credit card or other consumer debt (they carry a balance from month to month). Every dollar you pay toward debt, interest fees or other charges is a dollar that is not in savings, earning interest for you. Your goal is to pay down as much of your debt as possible so you can put those dollars to work for you instead of the lender. Depending on the amount of debt you are carrying, you could add a debt line to your wall chart. Charting your debt balance each month can be a powerful inspiration for paying down those balances as quickly as possible. People who choose debt as a way of leveraging income need to realize that managing debt costs life energy and often involves a lot of risk. For more resources and stories about dealing with debt, check the FI website.
Case Study: Chris Family Wall Chart
Within the first few months of plotting the familys wall chart, it became obvious that Chris family expenses were usually greater than their income. Chris asked for a significant raise in December, which helped them start to live within their means. The family income is erratic though, due to Jessies self-employment, so the first goal the family set was to keep adding to their short-term savings, as well as paying down their large credit card balances and car loans. Merely charting income and expenses would not have reflected that some expenses were really paying down debt principal. (Because any extra income was funneled into extra payments, the income and expense lines run fairly parallel). Chris plots short-term debt and short-term savings balances to help follow their true progress toward their goals and to make sure that while paying down their debt, they dont decrease their rainy-day savings.
A Gentle Reminder
This is your life! Your responsibility, in continuing to track your money, is to be very honest. If youre spending a lot, it will show up on the wall chart. If you cut back on your gazingus pins, it will affect your expense line for the better! Change is difficult, and no one is perfect. You will have good months and bad months and they will show up on the wall chart. Thats OK. Use those times to remind yourself of your purpose for doing this and your goals. What challenges are you facing? What support do you need? Consider checking the FI website and discussion boards that are available to you. Use your creativity, intelligence and resolve to find ways to keep going. You are worth it.

Plotting and posting your wall chart where you will see it every day will help you focus on your overall progress toward your goals. How do you feel about having your financial life portrayed visibly? Your wall chart can be a great reminder of your progress and a motivator to keep tracking your daily expenses. What would you like your wall chart to look like in the future, after following this program?

Set aside enough time each month to do your tabulation, evaluation and wall chart. This time should be something you look forward to, so build in rewards by emphasizing the step that gives you the most satisfaction. Create a wall chart that is visually appealing to you, using colors, gold stars or other technology/tools that you find interesting. After all, youll be looking at it every day. If looking at your chart every day becomes a source of stress, take a deep breath and take a look at it when you are doing related activities. Some keep it at work, to help them appreciate that theyre earning income; some keep it by the shopping list to remind them of their intention to make wise purchasing decisions. This is a tool for positive motivation dont use your chart as a bludgeon or a task-master! Remember, the important thing is maximum fulfillment. See the FI website to see how others have approached this step.
STEP 6
RESPECTING YOUR LIFE ENERGY: MINIMIZING SPENDING
Step 6: Minimize Spending
Step 6 Overview
In the previous steps you redefined money in a way that made it more real in your life as a function of your life energy, your time. You have tabulated your monthly expenses, evaluated them in terms of fulfillment and alignment and created a chart where you can visually see how theyre trending. In this chapter you will look at ways to lower those expenses because you respect your life energy and want to be sure youre spending it in a way that feels good to you. And you will look at expanding your sense of personal economics to include creating long-term value for yourself and others. This chapter outlines some general principles to help you explore ways to eliminate unfulfilling spending and also create value non-monetarily.
Step 6 Preparation
Review your monthly tabulations and your wall chart. Identify categories in your monthly tabulations that are not providing satisfaction or are not in alignment with your values. Notice categories that might contain gazingus pins those things you have a weakness for, that you just cant help buying even though you already have plenty of them. Evaluate the relationship between income and expenses in your wall chart. How do you feel about your current real hourly wage (RHW)? o o o o Not enough OK, but could be better Just the right amount More than I need
Complete the following sentence (making your best guess at the percentage): I could still be satisfied if I were spending. o o o o o o 5% less than I currently spend 10% less 15% less 20% less 25+% less More than I currently spend
Step 6 Preview
Increase your consciousness around spending to decrease or eliminate the amount of life energy (money) that flows out of your life unnecessarily. Look for ways to conserve your life energy: Evaluate purchases in relation to fulfillment, goals and values. Consciously eliminate unnecessary spending. Consciously reduce spending that doesnt bring maximum fulfillment. Require maximum value for your money.
In other words, stop spending life energy on stuff that is not bringing you maximum fulfillment in proportion to the amount of life energy you spent on it. Think about how much space and time that might give you to focus on living your life in alignment with your purpose, goals and values.
Benefits of Conscious Living

Builds Awareness As you become more aware of the flow of money in your life, you will become more aware of the flow of your life energy in general. Using the tools youve created so far (life earnings sheet, balance sheet, tracking system, monthly tabulation with three questions, wall chart) youre seeing more clearly the relationship between the money you spend and your personal satisfaction. Simple awareness can bring about change. Stimulates Behavior Change At this point in the program you may be experiencing some changes in your spending habits. In the past you may have mechanically bought things just out of habit (think of those gazingus pins), whereas now you are being more thoughtful, more deliberate, more intentional. Through careful observation of your patterns, you are building a more conscious approach to each transaction you make. Conscious observation of your patterns results in gentle and natural shifts in behavior. Notice how different this feels from budgeting, from trying to allocate future expenses based on a standardized budget and the sense of deprivation that often goes along with that. Helps to Define Your Enough In the past you may have thought of money as your sole security against a future where a lot could go wrong and because future needs are unknown, you never had the sense of having enough money. Actually, true security more often comes from having the skills, ingenuity and personal relationships to find creative solutions, and spending so much of your time making money may be getting in the way of building those types of security! Reducing your expenses results in reducing the pressure on your money earning, giving you more options and freedom.
Consciousness is a key component in achieving your goals
Step 6 How It Works Part 1: Conscious Elimination of Unnecessary Spending

Start looking at where you could eliminate or greatly reduce expenses. Ask yourself, Are there more efficient or beneficial ways for me to spend my life energy? Not only will this save you money, it will save you hassles and stress! Eliminate Consumer Debt Consumer debt is interest-bearing debt for things that wont make you more money than they cost you (as opposed to loans to grow your business or increase the value of your house through necessary renovations). Credit-card purchases and installment payments for things that depreciate in value, like furniture, can end up costing you not just for the items bought, but in interest, fees and all sorts of hidden or unexpected charges Case Study: Chris Monthly Spending When Chris looked at her monthly spending, she found that the interest on her consumer debt alone (credit cards and car loans) was 6% of total expenses (around $500)! She stopped using credit and started paying down her debt with the maximum amount she felt she could afford each month. Charting the falling debt balance on her wall chart was a great motivator. Credit vs. Debt Originally, credit was tied to ones capacity to pay someone back quickly. Merchants extended credit, enabling people to buy products immediately, and expected to be repaid promptly after payday. Doing so resulted in the perception that you were worthy of credit. Now, credit card companies pay the merchants immediately, but charge them a fee to do so. However, those credit companies make more money when you DONT pay your balance immediately, by charging you interest and fees on the debt. The more debt you have, the more money they make. Therefore, you can now have a high credit rating (be worthy of more credit) and therefore get LOTS of offers, even if you DONT have the ability to pay in the near future. Remember that businesses that offer to give you credit are actually offering to sell you debt and it will cost you!
Develop Maintenance Skills By taking proper care of your possessions you can eliminate repairs that are due to neglect. Take action now to prevent minor problems from becoming major disasters later. Case Study: Jamies Bike Maintenance Jamie took a bike maintenance class to keep a beloved bike in good shape and ease the wear and tear of weekly mountain bike trips. This saved about $40 per month in maintenance and repair bills. Case Study: Chris Home Maintenance Chris enlisted her eldest son to help stain the back porch each summer (with non-toxic stain), helping to stave off a $5,000 rebuild if the boards rotted. Eliminate Unnecessary Medical Bills Medical bills are generally not health-care costs; medical care is what you feel forced to buy when youre not healthy. In countries with private medicine, making healthy choices can eliminate some kinds of medical bills, resulting in big savings. Case Study: Chris Work Enviroment Chris realized that her high-stress, long-hours job was the source of her bursitis and carpal tunnel pain and the resulting physical therapy bills, which were only partially covered by insurance. She had her employer bring in an ergonomic specialist to redesign her office, thereby reducing the repetitive stress issues. Eventually she decided to downshift to lessstressful work, eliminating the source of the problem altogether. Eliminate Costly Entertainment Often, when their personal income goes up, people engage in ever more expensive pasttimes to entertain themselves. Discovering the needs and desires that underlie the enjoyment can help spur creative, cheaper approaches. Case Study: Jamies Love for Music Jamie loves music and spent a lot of money on concert tickets and music recordings each month. Recognizing that new, live music was a core need, Jamie offered to write reviews for local papers and radio stations in exchange for free concert tickets. That eventually led to playing in a band and getting paid for joining in the performance!
Rent or Borrow Whenever Possible Before you buy an item, evaluate how many times you really need to use it. Does it make sense to own it (plus maintain it, service it and store it)? Case Study: Chris Home Repairs Once they started doing their own home repairs, Chris became worried that tool purchases would take the place of maintenance fees! So Chris spouse, Jessie, started a neighborhood tool exchange and bought only necessary tools that were missing from the neighbors collections. Eliminate Gazingus Pins Even if you dont want to eliminate your gazingus pins entirely, find ways to enjoy them without having to spend money on them. Case Study: Jamies Music Gazingus Pin Music recordings were Jamies big gazingus pin. Once Jamie started attending concerts with a press badge and/or as a performer (see Eliminate Costly Entertainment above), the other bands performing were usually happy to distribute a promotional copy of their music; thus the gazingus pins were attained without spending money for them! Find Other Ways of Meeting a Need Money was invented to purchase things that were needed or wanted and that couldnt or wouldnt be created by the consumer. What if you tried to orient your life energy toward creation rather than consumption? In the process of finding non-monetary ways to meet your needs and desires, you will build skills, relationships and confidence in your own personal resources. Case Study: Chris Family Meals Chris family eliminated almost half their meal costs in a way that helped establish them in their new community (you will hear about their decision to relocate later in this chapter). They joined a community garden, in cooperation with some retired former-farmer neighbors. They also shifted from weekly family restaurant meals to dinner parties, rotating the hosting duties with friends. The resulting wholesome, nearly free food and the camaraderie benefited their bodies as well as their pocketbooks, and provided the children with older mentors who had both the know-how and the time to teach them self-sufficiency skills.
Part 2: Conscious Consuming to Lower Your Spending

Conscious consuming includes understanding the value of what you are buying, beyond its current price tag. When you spend your money your life energy make sure youre getting a good return on that investment. Anticipate Needs Be aware of what items you might need in the near future; this kind of lead time will enable you to take better advantage of sales. Assess how much of the price of an item is due to demand: many things that have a lot of hype are marked up when they first go on the market, but later prices drop considerably. Case Study: Chris On-Sale Toilet One of the toilets in Chris house had one too many toys accidentally thrown down it over the years it was on its last leg. One more fix worked, but Chris started watching the circulars for sales. She bought a low-flow toilet on sale and had it waiting in the garage for the next breakdown. No need for an emergency run to the hardware store to pay top-dollar! Look for Quality Do some research on the item youre planning to buy. Is it made of strong, durable materials? Is it well crafted? How long will it last? Go to the library, the internet or people in the know to get recommendations on the best brands and models, and buy from companies that make quality products that last. Look at additional costs related to efficiency will it increase your electrical, fuel or water expenses? How much will it cost to maintain? Sometimes spending more money for a high-quality item can save money in the long run. Consider waiting for second-generation products. New models are not always tested in realistic conditions. Think about waiting until consumers have given enough feedback for the company to make improvements. Often second-generation products are also priced more moderately. Evaluate the Value of Add-ons Do you really need or want all the bells and whistles that come with some items? Can the more modest model meet your needs (and cost less) than the fancier one? Assess your real needs and determine the appropriate version for your situation. Case Study: Jamies Replacement Mobile Phone Jamie had a second-generation mobile phone for nine years before it finally stopped working. At that time a new gadget was being heavily marketed that included all kinds of new functions. Although it seemed like a hot item (at premium prices), Jamie noted that in the past nine years those fancy displays and functions had not seemed necessary. So was there really a need for them now? Buying a refurbished phone that was the same high-quality brand as the previous one not only kept that phone out of the waste-stream, it also saved hundreds of dollars worth of Jamies life energy.
The Value of Minimizing Spending This is not about budgeting and deprivation. Its about using your intelligence and being resourceful so as to live in alignment with your sense of fulfillment and your values. Its your life energy youre saving. Minimizing your spending will result in a natural and increasing tendency toward greater fulfillment and greater integrity. Spending less can feel better because it: lessens the pressure on earning frees up money and time for things that result in lasting satisfaction.
Case Study: Chris Re-orienting Spending According to Priorities
FAMILY WALL CHART

28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Income Expenses
In this chart we see that Chris and her familys expenses dropped immediately upon starting the program and then averaged out at a level that was still uncomfortably close to the amount of income that the family was generating. So the family made a big decision that utilized several aspects of Step 6, combining both conscious spending and elimination of unnecessary spending. They decided to renovate their vacation cabin and make it their full-time home. Renovation costs account for the large spike in the expense line on their wall chart. Chris found a good (and less stressful) job in that new location, they sold their suburban home and moved to their favorite place. Although they didnt make a profit from selling their home, this move eliminated a lot of debt and resulted in a big shift in their savings.
O c N o to b e ve r D e m be ce r m b J a er nu F e a ry br ua r M y ar ch Ap ril M ay Ju ne Ju A ly Se u gu p t st em b O er ct ob No v e er D e m be ce r m b J a er nu F e a ry br ua r M y ar ch Ap ril M ay Ju ne Ju A u ly gu st
With less time and money spent on travel between work and two homes, their work/life balance greatly improved. This move provided the impetus to develop home-maintenance skills and build new community resources like tool and garden co-ops, resulting in even less spending. At about the same time they traded in their expensive new career car for a less glamorous but more gas-efficient used one, thus eliminating a car payment. These shifts resulted in a very comfortable gap between their income line and their expense line they were finally living within their means! They eliminated the clutter and chose fulfillment instead.
Conscious Actions
Here is a sample list of actions that can minimize or reduce spending. Which ones could work for you? Conscious Elimination Get cash when youre at the bank or grocery store instead of at Automatic Teller Machines that charge fees. Make holiday presents for family and neighbors throughout the year rather than buying things with debt cards at the last minute. Cancel Comprehensive and Collision insurance on that dented old beater youre still driving. Put enough of a down-payment on your house purchase to eliminate mortgage insurance (usually 20% of value).
Conscious Consuming Buy vegetables and fruits that are in season (or better yet, buy seeds and pots to grow them yourself on the patio!) Buy last years model or a refurbished original. Buy one quality item that can serve several different purposes, rather than a separate item for each purpose.

Minimizing spending is not about deprivation. It is about getting the most from your life energy and enjoying both greater fulfillment and increased alignment with your values and goals. Spending less can feel better because it: o o lessens the pressure on earning money frees up life energy to devote to things that bring lasting satisfaction.
You can decrease unnecessary spending through conscious elimination of unnecessary expenses and conscious consuming. There are many non-monetary ways you can get your needs met and create more fulfillment. What categories of spending used to be automatic (like those gazingus pins) but are now decreased or eliminated? Why did you decide to change them? How did you make these changes? Evaluate your approach to the following and explore how you could use the principles of Step 6 to decrease expenses and improve how you relate to these areas in the process: o o o Your home Your body Your community
As you begin to practice conscious elimination of expenses and conscious consuming, notice: o How are you changing the attitudes and behaviors that no longer serve your purpose? How are you increasing your fulfillment? In what ways is your life richer?

Do NOT approach this like a diet, depriving yourself of what brings you joy or satisfaction. Remember, this is about respecting your life energy! Introduce changes at a reasonable pace that brings an ongoing feeling of accomplishment, gradually building momentum toward your goals. Look at your categories. Lowering your expenses will occur painlessly when you recognize the categories where you are not getting proportional fulfillment and those that are out of alignment with your purpose. Sometimes changing our spending habits involves taking some risks and stepping out of our comfort zone. This can be especially true in terms of interactions with others. Be patient with yourself, but do push out of your usual boxes and be open to what you can learn in the process. o For example, even if youre shy, ask a friend or neighbor who has useful homerelated skills to teach you how to do some of those things (can vegetables, fix broken furniture, run diagnostics on your computer). Offer to do something for them (make them dinner, babysit) in an exchange of equal value. Be willing to ask questions of sales people and manufacturers to determine whether an purchase really suits your purposes, even if it exposes your ignorance about the item or activity.
Keep observing how these changes affect your monthly tabulation and wall chart and how you feel about that. Remember that the purpose of Step 6 is still to align your personal finances with your long-term goals and values not to be a miser! You may find that eliminating unnecessary spending can actually allow you to spend more for items that satisfy other concerns besides price, like supporting local businesses or buying from toxic-free manufacturers. There are many good resources with hints and tips for reducing spending. See the FI website for helpful books and organizations.
STEP 7
RESPECTING YOUR LIFE ENERGY: MAXIMIZING INCOME
Step 7: Maximize Income
Step 7 Overview
As mentioned in the previous chapter, respecting your life energy is one of the key principles of this program. While Step 6 explores how this principle applies to expenses, Step 7 applies it to income. Together these two steps orient your personal finances toward the goal of maximum fulfillment and freedom and help free you from the rat race. Step 7 is about increasing your earnings, exchanging the life energy you put into your job for the highest possible income, without compromising your values or your health, for a self-defined period of time.
Step 7 Preparation
Take some time to reflect on your current reasons for engaging in this financial program. (They may not be the same as when you started). Plot your latest monthly income on your wall chart (if you havent already). Estimate the hours you may have left in your life: ____ years x 8766 hours per year = ____ Estimate the hours you may have left on the job until you expect to retire. Example: 40 hour workweek x 52 weeks/year x 20 years = 41,600 (41,600 hours of work left until retirement age 20 years from now). 40 hours/week x 52 weeks/year x ____ years = _____ hours What is your evaluation of your current real hourly wage in relation to your income goals for that length of time? o o o o Not enough OK, but could be better Just the right amount More than I need, I can retire earlier
What is your evaluation of the current level of effort youre putting into your job? o o o My absolute besttotal integrity and value Its a jobI just do what I have to do I take as much as I can, give as little as I can
Step 7 Preview
Maximize your income, working for a self-defined period of time, while maintaining your integrity and health,. In the following pages we will explore what this means in more detail. There are three general aspects to Step 7: Maximum income means earning top dollar for your time, which involves putting top effort into your employment and demanding pay equal to that effort. In addition it involves reducing jobrelated expenses, which increases your real hourly wage. Compromising your health or your values, even for a short period of time, is detrimental to achieving your goals for Financial Integrity. The means are as important as the ends. You define how long you pursue paid employment, based on criteria of maximum fulfillment rather than government or corporate policy.
The Purpose of Paid Employment

In Step 6 we focused on minimizing spending reducing the flow of money out of your life. Now well look at the flow of money into your life. Most people live off the income they receive from working at a job. In this chapter you will find some activities to help you better evaluate your employment income. Later in the chapter you will also consider other sources of income. People often go to work for reasons other than simply supporting their material well-being. For many its not just about a paycheck; they have all sorts of emotional needs wrapped up in their jobs. Which statement best describes your purpose for paid employment? For prestige, status, power and respect To express my creativity To be successful in the world Because of duty or public service For enjoyment, stimulation and learning Because of social or family expectations Because its my role/identity To interact with others, to have social connection and a sense of cooperation To give me a sense of purpose and contribution So I dont have to stay home and take care of the kids To have something to do, to structure my time For the benefits (health insurance, life insurance, and other) To earn money (to pay creditors, save for the future, sustain my current lifestyle).
If you checked off reasons other than the last two on the list, consider this: You could do that for free, without getting paid for it! Any perceived benefits, other than financial, of a paying job can be obtained from non-paying activities such as volunteer work, caring for family, community activism, playing sports the list of options is endless.
The Only Purpose of Paid Employment This program proposes a radical notion: There is only one purpose of paid employment: to get paid. Does that surprise you? Reflect on your real hourly wage calculation. In terms of what you get from employment, what really counts has monetary value. (Even benefits like health insurance really come down to the monetary value they bring you). This idea does not mean to devalue the work that youre doing. Your work may be good, valuable and useful. Its not a question of WHAT youre doing; its a question of WHY youre doing it. Sometimes were attached to our jobs for emotional reasons, and that can cloud our vision. Clarifying the purpose of employment helps to bring consciousness to the realm of earning and income. Separating Income and Work The idea of separating money from work can be very useful. When we break that seemingly inseparable connection between our income and our work, we can look at our job and ask: Is this really what I want to be doing with my life? Check to see if your job supports or hinders the following areas of your life:
Area of life Personal relationships (family, friends, neighbors) Personal growth (emotional, intellectual) Health (Physical) Inner peace (spiritual) Contribution to society (community, planet)
Hinders
Supports
Case Study: Chris Career Chris decided, as a young adult, to be of service to people by working in the health-care field. She also hoped to have a family and wanted to ensure sufficient income for that, so she took a position as a public hospital administrator. After 20 years of dedicating her life to that work, she started to notice that she spent more time doing paperwork and dealing with administrative bureaucracy than helping sick people. At the same time, Chris spent much less time actually being with her family than she spent earning money for them. The stress was affecting her health, her motivation was starting to wane, and she began to feel like her performance was decreasing, even as her income slowly climbed each year. When stress-related arm pain resulted in increasing grouchiness, both at home and at work, she realized it was time to re-evaluate her employment situation. She had to question, at age 40, whether or not she (and her family) were willing to continue in this situation for 25 more years until she reached official retirement age.
Step 7 How It Works

This part of the program is about creating options for yourself so that you do not HAVE to work for any longer than is needed to reach enough. (In Step 8 you will help define for yourself what enough really means).
Step 7 Actions Move toward the highest possible income Consistent with your integrity and health For a self-defined period of time
Lets break Step 7 down and then see how Chris and Jamie apply it.
Part A: Move toward the Highest Possible Income

How many hours, according to your calculations, do you have left in your life? In economic terms, your time is your commodity and it is finite. When you value your life energy, you want to maximize the benefit from any time you expend.
When you trade your time for an income, are you getting the full value your life deserves?
How could you earn more money in your current job, while remaining in alignment with your integrity and your health? Could you move up a level or take on extra work? Some people take a second job or increase their commitment to the current job.Some people leave their old job and move to one that maximizes their sense of engagement as well as their income, rather than staying put merely for the sake of security. Most people find that when they work with a clear purpose, opportunities open up and raises are easier to negotiate. Why? Because when you know your real worth you become a more valuable employee. This helps you value yourself enough to ask for a wage that matches your effort!
Part B. Consistent with Your Health and Integrity

It does you no good to maximize your income if it costs you your health or your integrity. If you reach the point where your job is making you sick or increasing your chances for future illness or it is impacting your pride in your workmanship or compromising your values its time to explore other options for achieving your goals.
Remember: The point of this program is fulfillment!
In addition, sacrificing your health or your integrity even in the short term actually can decrease your ability to make money. An employee with a high rate of absenteeism, or one who cuts corners or doesnt care about the quality of their work, will have a much harder time negotiating raises, obtaining a good reference or finding a higher paying position.
Part C. For a Self-Defined Period of Time

Suppose you look at having a job (or several jobs) as a source of income for a finite and selfdefined period of time. Some people assume they will work for their rest of their lives, or at least until retirement age (which may seem just as long). At some point we will all stop working, whether we want to or not! When that happens is a choice we can make for ourselves. We can define that time and work towards it giving us an even greater sense of purpose and fulfillment while were doing it!
Your job is a means to reach your goals and focus on what has meaning to you.
Would you feel differently about your job if you knew it was for a self-defined and finite period of time? Would you Put in more effort? Work with more integrity? Not take setbacks or obstacles so personally? Give it your enthusiasm, and your appreciation?
Your job is no longer Your identity Your prestige or status A paycheck thats gone in two weeks
With this perspective you begin to more closely and consciously integrate your life energy with your work.
Case Study: Jamies Big Shift from Short-term to Long-term Thinking Jamie has worked as a house painter ever since getting an after-school job in Uncle Walters house-building business, recognizing early on that working in the trades, while physically demanding, gave a lot of income security for someone who didnt have a very good education. As an adult, Jamie moved to a bigger city where prevailing wages were higher and work more plentiful. Also, as we saw in Step 6, Jamie figured out some ways to actually earn money, rather than spend it, on leisure activities. But in watching how co-workers had increasing physical difficulties as they got older, Jamie realized that a career that entailed physical labor was necessarily going to be shorter than others. It was therefore obviously important to maximize income to accommodate an earlier retirement, or to move into management. Jamie took on extra responsibilities for more pay but didnt enjoy overseeing others, which meant that following Uncle Walters example would NOT be fulfilling, despite the better income. What to do? Research revealed that union wages were significantly higher, and even off-set the extra job-related expenses of initiation fees and semi-annual membership dues. Union membership also offered more quantifiable benefits like management training and better retirement plans. Uncle Walter, Jamies hero and mentor, was dismayed, since he was avidly anti-union, but Jamie knew that this was the best option, in alignment with Jamies values and health concerns. This is how Jamies wall chart looked, after making the switch:
Case Study: Chris Career Despite stress-related health issues, Chris first priority about employment was to increase income and start to make ends meet. She did some research and found that not only was her pay less than most of the colleagues in her geographical area, but the area had a lower wage than other locations. She used that knowledge to leverage a raise but with the raise came even greater work pressure. So Chris took a big-picture look at her career and her goals. She and Jessie had already decided that they did not want to give up their beloved family vacation cabin; they had decreased their daily expenses as much as they could, but still it was not enough. What to do? In reflecting on her real reasons for working, Chris made a long-term plan that involved compromises for a finite period of time. The family sold their big expensive suburban house and used the proceeds to make the vacation cabin into a suitable year-round residence. Meanwhile Chris became the executive for an exclusive assisted-living facility in that highpriced vacation area. Although the switch didnt increase nominal income much, Chris work was much less stressful than at the public hospital, the hours more reasonable and the commute much less, making a big difference in the real hourly wage as well as Chris state of mind. Although the work was less exciting, involving things like marketing, it allowed time with family to re-emerge as a primary interest. Chris set a goal to work in that corporate management position for ten years and to use contacts there to help transition, once she reached her goals for increasing her net worth, into more hands-on work in the non-profit hospice field. Here is what the household wall chart looked like, with the spike in expenses accounting for improvements on the cabin that became their new home:
FAMILY WALL CHART
30,000
25,000
20,000
15,000
Income Expenses
10,000
5,000
Ju ly Au Se gus t pt em be r O ct ob N ov er em b D ec er em be r Ja nu ar y Fe br ua ry M ar ch O ct ob N ov er em b D ec er em be r Ja nu ar y Fe br ua ry M ar ch M ay Ju ne M ay Ju ne Ap ril Ap ril

Maximizing your income is a way to respect your life energy. What attitudes about yourself, about your job or employer, about your ability to find a job, or about current life circumstances might be holding you back from increasing your income? How attached are you to your job? Is your job your identity? If you didnt have a job, how would you describe yourself? If you didnt need a paycheck, what would you be doing? You can choose how long you work for pay. Does knowing that paid employment is only for a finite period of time make you feel different? How?

Make three lists of income-related goals: short-term (this month, this year), mediumterm (five-ten years) and long-term (the rest of your working life). Brainstorm ways to meet those goals. Research things you could do to increase your real hourly wage through both increasing income and decreasing work-related expenses. Review the list of your non-tangible assets from Step 2 and see if there are some ways you could derive income from any of those assets. For example, you throw great parties that people really enjoy; could you turn that skill into a side-line job organizing events or conventions?
STEP 8
CAPITAL AND THE CROSSOVER POINT
Step 8: Capital & Crossover
Step 8 Overview
Whatever your specific goals in starting this program, the underlying intention probably had something to do with achieving clarity and ease in your relationship with money and a sense of enough-ness. In Step 7 you looked at reaching enough employment and working for a finite period of time. Now in Step 8 you will learn how to predict just when that finite period can end; we call it the crossover point. In Step 8 you will look at how your savings can be used as capital to earn investment income. Building on your wall chart (Step 5) youll project out to your crossover point, when you can meet your expenses through investment income rather than paid employment. Projecting when that date might reasonably occur is empowering because it places your current employment within the larger framework of your life.
Step 8 Preparation
Update your wall chart, if you havent already. Keeping in mind Step 6 (minimizing expenses) and Step 7 (maximizing income), assess where you stand in terms of receiving value for your life energy: o o o I could decrease my expenses to a greater degree I could increase my income to a greater degree My income and expenses have currently stabilized at a point of maximum value received for my life energy.
Envision your life without a paid job: How would you spend your time? What would be important to you? How might your answers to these questions affect your wall chart? o My expenses would increase (due to the lack of employer-paid benefits, due to increased travel, or the like) My expenses would decrease (due to the lack of work-related expenses or greater time for do-it-yourself projects, and others) I would receive income from selling assets that were no longer necessary (commuter car, primary home, and so on) I would spend money buying new assets (musical instruments, electronics)
What is inflation? Check all statements that are true for you: o o o o o o A necessary and inevitable part of capitalism A result of banking policies that devalue money An indicator of a healthy economy An economists statistic, manipulated for political ends An economic force that I cannot control A generalized number that doesnt accurately reflect my personal experience
Step 8 Preview Chart Your Monthly Investment Income and Find Your Crossover Point
Part A: Plot Your Investment Income on Your Wall Chart By implementing Steps 1 through 7, over time your employment income will rise above your expenses, resulting in savings. By investing that money in safe, high-yield vehicles, you will start receiving income independent of your employment income. Plot your investment income as a separate line on your wall chart. See the plotted lines in the sample chart below. Part B: Project Your Investment Income into the Future Project your monthly investment income into the future, based on your average rate of income each month. See the green line in the sample chart below. Part C: Project Your Expenses into the Future Estimate the level of spending you expect to have in the future. Keep in mind your responses to the preparation exercise, Envision your life without a paid job. Project your monthly expense line into the future on your wall chart. See the red line in the sample chart below. Part D: Notice the Crossover Point At some point your monthly investment income line will cross above the expenses line. That is your crossover point. It means you have enough money coming in to cover your normal expenses. Notice where the green line crosses over the red line in the sample chart.
W Chart all
1400 1300 1200
M o n e y
1100 1000 900 800 700 600 500 400 300 200 100 0
F eb M ay S ep O ct O ct F eb M ay Jul Aug O ct
projected lines
Ex penses Income Inv estment Income
Crossover Point
M onths
Capital
Currently, most of your time and life energy are probably being spent on earning income. In Step 7 we started thinking about maintaining a job for only a finite amount of time. Through maximizing income and minimizing expenses, an exciting thing starts to happen on your wall chart. When your expense line falls below your income line, an interesting space develops in Chris chart (below) weve colored it yellow. Case Study: Chris Wall Chart
This is savings. You can also call it capital because in Step 8 this money is invested to create income. When you do that you are using your money to make more money. In Chris chart (above) youll notice that since September her employment income has remained greater than expenses and the space between the two (shown in yellow) is increasing. She is no longer accumulating debt, no longer using credit cards to cover the expenses that exceed her income she is building savings. If she invests those savings in high-interest or dividend-bearing accounts, she will be creating investment income.
Investment Income
Capital is Money Invested to Create Income An investment is placing your capital in some form of wealth other than cash with the expectation of deriving income. One approach is speculative investment: investing your capital in things like real estate, stocks or gold bars, with the hope that their value will rise and you can sell them later for a profit. The other approach is investing for fixed income lending your capital to someone else and charging them a mutually agreed-upon interest rate for that use. This investment could range from a simple savings account to a bond. Many people use bank accounts merely to store their savings for spending later, and they dont pay much attention to earning interest. Capital, as opposed to savings, is amassed not to be spent but to be invested for a certain period of time. The whole point (for you, the investor) is what your capital earns over that period. The income you receive from your invested capital is of a different nature than your job income. You receive it whether or not you go to work. So, on your monthly wall chart you will track that investment income separately from your other income call it your Investment Income. Case Study: Jamies Investment Income At the age of 18 Jamie received a graduation gift from Uncle Joe in the form of a 20-year savings bond worth $20,000 and paying 6.75% interest. (Although this interest wont be paid until year 20 when the bond matures, Jamie calculates the interest earned monthly). With that income, combined with the compounding interest from other investments, the yellow Independent Income line is slowly rising. Notice the jump in that line when Jamie put $15,000 from savings into a higher-yielding investment.
The Power of Compound Interest

When you invest your capital in an interest-bearing account, that money (your principal) earns interest. Many investments put your earned interest back into the principal, thus adding to that original amount. This new amount is a combination, or compound, of principal and interest. Compound interest is the interest earned on the new compounded amount invested. As the original principal continues to grow in this way, so does the amount of interest you earn. Its interest earning interest from now on. To illustrate, below is a chart of an investment ($5,000) with compounded interest (5.5% interest rate). Note how fast the money grows over relatively short periods of time.
Investm with Com ent pound Interest

18000 16500 15000 13500 12000 10500 9000 7500 6000 4500 3000 1500 0 year 0 year 3 year 6 year 9 year 12 year 15 year 18
After 5 years, the principal has grown from $5,000 to $6,535.
M o n e y
After 10 years, it has grown from $5,000 to $8,541.
After 15 years, it has grown from $5,000 to $11,162 (more than double the original investment).
Months
Note: if you were to keep this investment going for just another 5 years, the original investment will have almost tripled, from $5,000 to $14,589. The sooner you invest your capital, the greater the impact of compound interest and the faster you will reach your financial goals. So, start now! (Step 9 will delve deeper into investing).
Step 8 How It Works

Part A: Plot Your Investment Income on Your Wall Chart Plot your investment income as a separate line on your wall chart. Part B: Project Your Investment Income into the Future You have developed savings, have invested that money and have been receiving interest on that capital which you have been posting on your wall chart. Now on your wall chart you can project that monthly income into the future. With a light pencil line, project your monthly investment income into the future, based on your average rate of income each month.Part B. Project Your Investment Income into the Future Part C: Project Your Expenses into the Future Focus, for a moment, on the expenses line on your wall chart. As you have applied conscious spending strategies over time, this amount may have reached a comfortable level that no longer seems out of proportion with the amount of life energy it costs you; you may have determined a level of spending that is the peak of the fulfillment curve for your current life. You can now reliably estimate how much you will probably spend into the future. Since expenses will fluctuate month to month, the determination of your monthly expense estimate going into the future is not based on the most recent month, but on the longer-term trend that youve been charting over time. (Refer to the FI web site for more information about the various ways people estimate their future expenses). With a light pencil line, project the monthly expense line into the future on your wall chart. Part D: Identify Your Crossover Point Notice what happens with the investment income line: it crosses above the expenses line. WOW! This is the crossover point the place where the monthly income from your invested capital exceeds your monthly expenses. At this point, you have defined enough and are financially independent. We often call the investment income line on your wall chart your independence income because you now have the freedom to choose whether or not you will work for money.
Crossover Point: Investment Income is Enough
Plotting this on your chart will enable you to see approximately when you might attain this measure of financial independence and have enough to live at peak fulfillment without paid employment.
Case Study: Jamies Crossover Point In projecting out to crossover Jamie decided to be conservative and estimate future expenses at the highest level theyd reached in the last year and then added on a bit more each subsequent year to accommodate increases in rent and other rising costs. Income was projected to increase similarly. Factoring in an intention to transfer money from savings accounts to higher-yielding CDs in $5,000-$10,000 amounts at modest interest rates, Jamies investment income line would cross the expense line by the end of the seventh year of following the program or age 35!
Jamie's Wall C hart Projecting C s ros over Point

9000 8000 7000 6000 5000 4000 3000 2000 1000 0
1 ar ye 2 ar ye 3 ar ye 4 ar ye 5 ar ye 6 ar ye 7 ar ye 8 ar ye
Income Ex penses Inv estment Income
Other Factors
Average Irregular Expenses & Estimate Future Expenses Some of your expenses will remain fairly stable from month to month, but some expense categories will be irregular these could include tax payments, holiday or vacation spending, car repairs, dental care, and so on. It is important to remember that there will always be unusual expenses. The more you can predict your expenses, regular and irregular, the better youll be able to predict just how much money you will need every month. Some people find it useful to average their irregular expenses over a year or more to get a sense of how those irregular categories affect the overall trends and what their future expenses might be. Calculate Your Average over a Year Add up a years worth of those irregular expenses and divide by twelve. On your monthly tabulation, enter that averaged amount each month rather than entering it in a lump sum in the month when each expense occurs. (Refer to Step 3). Estimating future expenses involves some research and some dreaming. If you didnt HAVE to work for a living, would you quit your job and change your daily life? How might that affect your expenses? Some people find that expenses go down dramatically after they quit their jobs. Other people who have minimal work-related expenses actually find their expense line goes up a bit, as they spend money on activities that they didnt have time for before. But if you continue to apply Step 6, you can reasonably estimate what your expense level might be should you choose to change your lifestyle, and your crossover point will adjust accordingly. Factor in Personal Inflation Like many other macro-economic notions, the inflation rate so touted in the media is a calculation that may or may not have much relevance to YOUR life. Inflation means the rate at which the general level of prices for goods and services is rising. The statistical inflation rate is based upon the purchases of the AVERAGE WAGE-EARNER. In other words, the average person whos caught in the rat race. The question then is, how average are you? Chances are that, after following this program, you are not average at all! By applying all nine steps youll provide the best possible hedge against inflation.
The U.S. inflation rate is generally determined by the Consumer Price Index (CPI). The CPI looks at conspicuous consumption, but how the statistic is calculated has changed dramatically over time. At the time of printing, many basic common expenses, like food and home heating or air conditioning costs are not factored in to the official inflation statistic. It also excludes the purchases of the very rich and the very poor (or perhaps the very frugal). Samples are taken only from urban areas. For these and many other reasons, there is a lot of debate over the usefulness of statistics like the CPI and General Inflation Rate.
Calculate YOUR Inflation (or Deflation) Rate By the time you reach your crossover point many, if not most, of your expense categories will be deflated, rather than inflated. Assuming that youve minimized expenses as much as you can, your expense rate should be flattening out. By the time you have tracked your expenses over a number of years, you will be able to calculate your personal rate of inflation for the spending categories you expect to continue after crossover. Youll have data that is far more detailed and accurate for you than the government data. Take the spending categories from the past that apply to your life now and that you expect will apply in the future (groceries, utilities) Compare the current expense totals in these categories to the totals from the past Take that rate of change into account as you project your expenses into the future
The Wall Chart and Other Financial Goals

Your monthly tabulation (from Steps 3 and 4) helps you see your savings rate how much your income exceeds expenses each month. The amount of money you have saved, however, is not necessarily added to your bank accounts or investments. For example, you could be using that money to pay down your debts. The purpose of Step 8 is to motivate you to keep making progress toward a point of financial ease. You can add lines to your wall chart to gauge and celebrate your progress toward additional financial goals. Or you may want to create a separate chart for tracking debt or other financial goals. Case Study: Smith Family Decisions As shown in the accompanying chart, Chris family spent some big money remodeling their vacation home into a year-round residence, but it decreased their average monthly expenses significantly, in addition to eliminating a second mortgage. Large one-time expenses still occurred like braces for their oldest child in June of the second year so it was important for Chris that a certain amount of money be set aside as savings for just such unusual expenses. After that cushion was set aside the priority became paying off the familys large debt, and Chris charted their progress on a separate line (in black). As you can see, Chris independence income line crossed above the expense line within the second year of following the program; however, with over $20,000 left in short-term debt (not even including mortgage debt), Chris did not feel independent yet but she was on her way!
FAMILY WALL CHART
66,000 64,000 62,000 60,000 58,000 56,000 54,000 52,000 50,000 48,000 46,000 44,000 42,000 40,000 38,000 36,000 34,000 32,000 30,000 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Ju l Au y Se gu pt st em be r O ct N obe ov r em b D ec er em be r Ja nu ar Fe y br ua ry M ar ch Ap ril M ay Ju ne O ct N obe ov r em b D ec er em be r Ja nu Fe ary br ua ry M ar ch Ap ril M ay Ju ne Ju l A y ug us t
Income Expenses Short-term Debt Independence Income
Can You Imagine a Crossover Point in Your Future?

This is when you get to turn your dreams into plans. Planning involves taking concrete steps to create the conditions that will make your dream of financial independence become reality. Planning includes looking at what you want to do with your independence and at what effect that might have on your expenses. What expenses might go up if you arent working and spending your time in other ways? What expenses might go down?
Take some time to seriously consider, in detail, what your life might look like in the future and take this into account as you project your expense line out toward your crossover point. How long will it take to reach that crossover point? It depends on: How much monthly income you need How much capital you have to invest The rate of return on your investment
Finding Your Enoughness

Finding your enoughness is the key to this financial integrity program. At some point you will have defined the peak of the fulfillment curve (your enough) for yourself, based on your own experience. And now all the steps of the program come together to help you achieve your ultimate goal! Step 1: Your personal balance sheet. If you now recalculate your fiscal net worth, youll find its not only in the red but is growing, as your interest is compounded over time and there are no liabilities dragging it down. Steps 2 and 3: Consciousness tracking and tabulating your money. Because youve become conscious of how money flows in and out of your life, you can realistically project out to your crossover point the place of financial independence. Steps 4 and 5: Your wall chart. Asking the three questions and plotting your income and expenses lines on your wall chart helps you live in accordance with your values AND develop the freedom to devote your time toward fulfilling your lifes goal(s). If you arent employed, you might find that your expense line will actually go down FURTHER as you eliminate employment-related expenses. Step 6: Minimizing your expenses. Youve eliminated waste and spending that takes you away from your values and goals, because you know it will actually decrease your fulfillment and your freedom. Step 7: Maximizing your income AND valuing your life energy. You will realize that you can quit your job, or find other work that is more personally fulfilling, or volunteer your time and still meet the social and emotional needs that working has provided for you in the past.

You can generate income by investing your capital in investment vehicles. Inflation is a generalized concept that does not necessarily define what you will experience over time. Your personal spending trends define your own inflation rate more accurately than do national inflation-rate data. Once you have enough predictable, dependable income from your investments, you no longer have to work for a living. You are financially independent. What would you do if you were truly financially independent (didnt have to work to earn money)? Describe what financial independence would look like for you in terms of your work and your lifestyle. What shifts would you make in expenditures of money and time? How does it feel to be able to accurately estimate a date when youll be financially independent? How does this motivate you?

Keep your wall chart in a place where you see it regularly but if you start to obsess about it or use it as a tool to judge yourself, look at it only when you need a reminder of your goals. Do update your wall chart on a monthly basis and reflect on what its showing you.
STEP 9
SECURING YOUR FINANCIAL INDEPENDENCE
Step 9: Managing Your Investments
Step 9 Overview
In the previous steps we looked at building capital and reaching the crossover point the point where your investment income meets your expenses and thus predicts your financial independence. This chapter outlines some strategies to secure that financial independence. This information will apply not only after the crossover point, but now, as you amass and invest your savings along the way to that point. In Step 9 you will start to develop your own long-term investment program to provide sufficient income from a source other than paid employment for the foreseeable future.
Step 9 Preparation
Before you continue, ask yourself these questions: How long could you currently survive if you didnt have a paying job? How much money do you currently have saved for a rainy day (not including investment capital)? How much money would you like to have set aside? If youve ever had someone else help you with your financial activities (a family member, a banker, a stockbroker, or financial advisor) how did you feel about their involvement? o o o o I had a supportive mentor teaching me. I had a helpmate taking care of tasks, based on my informed decisions. I was disempowered and had no control. I didnt understand what they were doing.
What do you think is the meaning of the term disintermediation? o o o A grave robbers technique Moving from one school level to another Cutting out the middle man
Step 9 Preview
Develop and implement a long-term investment plan to provide secure income, for the rest of your life, from a source other than employment. Key characteristics of a successful plan: o o o o Absolute, maximum safety of your capital (non-speculative) Steady, guaranteed income (you know how much youll be receiving!) Minimal expense of your life energy beyond self-education Long-term (as in the rest of your life)
Financial Independence
So far in this program, the term financial independence has been used in a number of ways, including: Being free of worry and preoccupation about money. Feeling fulfilled whatever the level of your income. Having the sense of enough. Step 9s Definition of Financial Independence: Having sufficient income, from a source other than paid employment, to meet your needs for the rest of your life.
For the purposes of Step 9, the meaning for financial independence is more explicit. (See inset on the right). Since this program originated in the 1960s, most people have used the previous steps to free themselves of the burden of debt. Some people have used this program to save enough money for a few years sabbatical, in order to pursue opportunities they couldnt take advantage of while working. And then there are people like Joe Dominguez, the creator of this program who used all nine steps to free themselves from paid employment for the rest of their lives!
The focus and intent of this chapter is not to accumulate more wealth. Step 9 assumes youve already started to implement the previous eight steps, and envisioned the crossover point when you will have ENOUGH. At that point its time to stop worrying about money and get on with whatever is really important in your life. Anyone, from any walk of life, can achieve financial independence and you can have that freedom WITHOUT gambling in the lottery or the stock market, WITHOUT doing anything unethical, WITHOUT speculative, high-risk real-estate investments. By making well-considered choices now, you can be free from financial worries for the foreseeable future. It is UP TO YOU to secure that freedom, and the way to do it is to:
Become KNOWLEDGEABLE ADEPT and SOPHISTICATED about long-term income-generating investment vehicles
Step 9 How It Works Three Pillars of Financial Independence

CAPITAL Money saved and invested the income-producing basis of your investment program. As noted in Step 8, capital is money you have saved to invest in income-producing investment vehicles. The goal of Step 9 is to SECURE that capital. At this point you have established enough income from your capital to meet your needs, so you do not need to continue growing your capital. Its more important to make sure that your capital is always earning you a steady, predictable income to meet your needs, regardless of employment. CUSHION A cash reserve, earning interest in a readily accessible account, to handle emergencies, large unexpected expenses and lean times between investment income distribution. Aim to have enough cash to cover at least six months of average expenses, as determined in Step 8. Never withdraw from your CAPITAL in order to meet your daily expenses. CACHE Extra money, beyond your capital and cushion, that exceeds your established needs. Cache is a surplus of money (over and above what you have determined is ENOUGH for your needs) that accumulates for future use. It could come from increased savings based on continuing to follow Step 6 or from gifts, inheritance or other incidental income. Since cache is not crucial to your fulfillment, you can be creative with it. You could add it to your rainy day cushion. You could invest in vehicles that may not meet your usual criteria for investing capital. You could be generous in your donations, gifts or endowments. This is money you can play with, without impacting your independence!
Disintermediation
The purpose of Step 9 is to empower YOU to be in control of your own financial life and to make your own decisions to secure your financial success. A very important tenet is called DISINTERMEDIATION, or cutting out the middle man. This means informing yourself about investment vehicles that meet YOUR goals and values and then buying them yourself. By going directly to the source of investment to make your purchase, rather than giving your money to an intermediary (broker, financial planner, banker) who will invest your money for you (often buying the same investment instruments you could buy yourself), you will save all manner of management fees, load fees and other charges. We cannot give you an investment recipe to blindly follow that will work for you, guaranteed, for the rest of your life. It is up to YOU to know what the best opportunities are that fit YOUR values and long-term needs. We can, however, teach you some basics and suggest criteria you can use to create an investment program to secure financial independence as defined above. Disintermediation means: Taking responsibility for being knowledgeable about how to invest your money, in accordance with your goals and values. Taking responsibility for purchasing and managing those investments yourself, rather than going through an intermediary.
Your Investment Criteria

Be empowered to decide for yourself! You can choose how to weigh the various investment criteria listed below. Make your choices according to your values, current investment options, and your willingness to go back to paid employment if things dont turn out as you project. The suggested criteria on the following page are for people who dont want to worry about income for the foreseeable future of their lives. Its definitely not a quick way to make money, and its not going to vastly increase your wealth. If you have followed through on the previous steps you have achieved ENOUGHNESS and now the most important thing is to be free! Free to get off the work treadmill. Free from monetary concerns. Free to choose how you want to live. Nothing in life is guaranteed, but applying these criteria strictly and continuing to practice financial integrity for the rest of your life will create the surest likelihood that you never have to work again. Remember, Step 9 is simply to become knowledgeable, adept and sophisticated about long-term, steady income-generating investment vehicles WHY long-term? Youre now thinking in terms of the whole of your life and how to ensure sufficient income for the foreseeable future. By putting your money in long-term investments, you can expect a higher rate of return and you can lock in that rate for a longer period of time. WHY steady income? You know how much income you need to live with maximum fulfillment, so you need investments that will guarantee that amount and guarantee that the income will come in steadily so that you can be assured of covering your expenses. WHY knowledgeable, adept, and sophisticated? You dont have to become knowledgeable about ALL types of investments, just the ones that meet your criteria. The financial world is constantly changing, with new investment options showing up all the time. But an investment, like any other purchase, is an exchange you make with your life energy and people are going to try and sell you something with their benefit in mind. Luckily, youve learned how to become adept, knowledgeable and sophisticated about financial decisions, thanks to the previous eight steps. Now apply the skills learned in the previous steps to your investments with Step 9. Do your research and consider the long-term impact of your decisions. Minimize expenses (money and time) and look for long-term value. Maximize income within your prudent criteria. Apply your values and goals to your decision-making. Stay open and aware of new opportunities for growth and learning.
Suggested Investment Criteria

Safety Your capital MUST be protected. Speculative investments like stocks can make your capital disappear overnight and send you back to job-hunting. Safety of capital and income is a must. Yes, safe investments generally have lower returns than speculative ones. In this program, however, we approach investments NOT to grow income, but to ENSURE income for the long term. You dont want to worry about losing your savings the capital that creates that income so safety is absolutely required. Guaranteed Stable Income The rate of return must be established at the time of investment so that you know exactly what your income will be on an ongoing basis (and so you know you will be able to cover your expenses!) The income should be paid at regular intervals. And it should be available now, not at some retirement age specified by an outside authority. You must be able to convert your capital into cash-in-hand at any moment (and without losing a substantial amount to penalties) to handle emergencies that exceed your cushion. You dont want to have your capital or income diminished substantially by management fees or other investment charges. Beware hidden fees and penalties, and be sure to research tax implications of the various investment vehicles. The whole point is to be freed from having a job, so dont choose investment vehicles that bring you the job of having to maintain, watch and manage them. Financial markets change continually. In order to secure your income for as far into the future as possible, pick vehicles that lock in a rate of return for the longest term possible. These are called fixed income investments. If, later on you discover long-term investments that are better than what you currently hold, you can always shift investments, assuming youve followed the previous liquidity criteria.
Liquidity
Minimized Costs (Money)
Minimized Costs (Life Energy) Long-Term

Financial independence is having sufficient income, from a source other than paid employment, to meet your needs for the rest of your life. Anyone from any walk of life can achieve financial independence. (See the FI web site to find real-life examples). Did you consider financial independence a possibility when you started the program? Do you feel any differently about that as a goal now? In terms of the financial integrity program, the foundation of financial independence is investing your capital in secure, long-term investments. Financial independence can happen when that stable investment income is at a level that will meet your projected expenses for the foreseeable future. How is this different from the messages you hear about retirement? Disintermediation (cutting out the middle man) means taking responsibility for purchasing and managing your own investments. How do you feel about the idea of being responsible for your own investment decisions? What do you think will be the hardest part of this program for you to maintain? How might you meet that challenge?

Research investment vehicles for high yield and high safety. There are many resources available, both online and in periodicals, to help you do this. Watch out for fees, or penalties for accessing your money whenever you need to, which may cancel out any interest earned. Read the fine print! Many people who follow this program ladder their fixed-income investments by buying in batches with varied maturity dates. Laddering means that if one of your investments is called (if an institution pays back your capital and recalls the bond or other investment vehicle) you still have other investments that continue to pay income while you take the time to reinvest that capital. You can create pockets of money with differently weighted criteria. For example, you can prioritize liquidity for your cushion, prioritize security for your capital, and prioritize maximum returns (with more risk) for any cache you create and want to invest. See the FI website for more resources on investing from a financial integrity perspective.
CONGRATULATIONS!
Congratulations!
You have now learned all the basics to achieving Financial Integrity! The 9 Steps are skills and principles that can serve you for the rest of your life. They are like the steps in a recipe, or parts of a DNA spiral the building blocks of a fulfilling life. What grows out of them is up to you. You can get out of debt, align your financial actions with your inner aspirations, and achieve financial independence but even more subtle and profound changes are possible. Just as all the spokes of a wheel are important to moving forward smoothly, so it is with the steps. When you give equal weight to ALL the steps, you can go to amazing places very quickly. And when you discover how well they work for you, you will continue implementing them over and over again.
Independence and Inter-Dependence

At this point, people begin to fantasize about whats going to happen when they pass the Crossover Point and are financially independent. Like a prisoner released after many years in jail, many people whove reached financial independence have found it can take a few years to transition to the reality of that freedom. Others stay in the rat race out of worry about unforeseen events that may bring them back below the crossover point of financial freedom. Many people have asked if there isnt a secret Step 10 addressing the deeper transformations that start once they are free of financial pre-occupations! Well, there isnt a Step 10, because what you need to know is contained within the Nine Steps, but perhaps a little more subtly than is apparent at first reading. Remember the first part of the Fulfillment Curve Survival? When someone is struggling to create food and shelter, the work can be all-consuming. Its hard to think about the needs of others or take a longer view when our personal needs are so urgent. Many people carry that sense of pressure much farther up the curve, and it can be hard to let it go even after reaching the peak of enoughness. Other people fear the freedom of financial independence will just lead to boredom or a laziness that will undermine their sense of self-worth. Yet, there are adventures beyond the occupation of getting and spending that can be even more fulfilling. In fact, that was the whole point for program originator Joe Dominguez. After youve reached ENOUGH, and you are at the peak of the curve in terms of money spent, you can still increase your fulfillment.
Participation
When we have met our personal needs and wants, what is there left to do? Well, we can expand our focus. We can go from getting and spending to giving, receiving, and participating in a larger circle of concern, expanding the mindfulness of the nine-step approach into other aspects of how we live. We can put more energy toward contributing to the needs and comforts of family members and friends, our community, our nation, our world. Merely by living a joyful, free life and having the time to share it, we can inspire others to live a life of financial and personal integrity and fulfillment!
Joyful participation and service can expose us to new perspectives, expand our skill set, introduce us to new friends, strengthen our relationships, and give our life greater meaning than we ever knew before. Such personal expansion will serve us no matter what life throws our way.
Maintaining Financial Integrity

The late Joe Dominguez, upon hearing that someone attained financial independence through his method, would send them a kind letter with a real government bond in congratulations only the bond was issued by the Czarist Russian Government of 1916 (just before the Bolshevik revolution) and was consequently worthless! It was his way of slyly saying, Congratulations, but dont get complacent. Nothing is guaranteed in this world, so stay conscious, stay creative, and stay engaged even when you think youve reached the peak. Continuing to follow the steps in this program will not only keep integrity in your finances, but will also help you remember the real purpose of money, and that the exchanges we create are not just monetary. The rewards of life come whenever the flow of our life energy creates fulfillment for yourself and others. Keeping these principles in mind will help you to live productively for the rest of your life.
Financial Integrity Financial Integrity Transforming Your Relationship With Money
Group Study Workbook
The Financial Integrity Small Group Workbook version 1.1 was created and published in March 2009 by The New Road Map Foundation Creative Commons Attribution Share-Alike 3.0 US License, some rights reserved. The New Road Map Foundation is a 501(c)3 nonprofit organization that supports people in transforming their relationship with money and aligning their financial choices with their values. Tax deductible contributions to support this work can be mailed to: PO Box 1363 Langley, WA 98260 www.financialintegrity.org
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 United States License. This means you are welcome to use, distribute, and make adaptations and derivative works, with the following restrictions and attribution added to any work you use or create: This work is licensed under Creative Commons Attribution Share-Alike 3.0 US License. It is based on the Financial Integrity materials developed by the New Road Map Foundation, available for free at www.financialintegrity.org The enclosed material is based on the original seminars Transforming Your Relationship with Money and Acheiving Financial Independence, produced by the New Road Map Foundation and performed by Joe Dominguez from 19841986. The nine-step program in this curriculum was later also detailed in Your Money or Your Life (Penguin Books, 1999) by Joe Dominguez and Vicki Robin. In no way does this document grant use of anything written under the Your Money or Your Life title, which is under private copyright with all rights reserved.
FI GROUP DISCUSSION GUIDE | P A G E 2
The Financial Integrity Group Workbook

How to Use this workbook Use this workbook to faciliate discussions while using the Financial Integrity Program Guide. Groups may choose to rotate facilitating responsibilities. Facilitators will lead the check-in, read the key points and goals, read the questions and lead the discussions, and facilitate the exercises. Session Structure Materials: what you need for the session. Always bring the FI Program Guide to each session. Group members should each Bring the materials listed. The Facilitator should Have available the resources or tools listed. Goals: what we are trying to acheive, and why its important Check-In: at beginning of the session. Suggested questions for group members to share between-session thoughts and experiences. Key Points: of the FI Program Guide section Exercises: the step activity itself, or other exercises to build understanding Questions: for individual reflection Discussion: group sharing; build on reflection questions; facilitator reads aloud, or smaller break-out groups if desired Assignments: build on practice suggestions, homework to be done for next session Guidelines for Making Your Group a Success Attend each meeting Each session builds on previous sessions, so your presence is important. If you are unable to attend a meeting, inform that sessions facilitator. Read the Program Guide chapter for that session before the meeting. The chapter introduces the subject to be discussed in that session. Reading the chapter before session gives you time to contemplate the material and bring thoughts and questions to the group. Do the homework assignments
You will benefit from doing the assignments and the group will benefit from your full participation. If you cannot complete the assignments before the next session, do what you can, and come to the next group meeting anyway. Do the steps Do the steps as they are presented in the Program Guide. While other methods may work, your purpose here is to learn this method, which has a proven track record for producing significant results. The steps reinforce each other and work best when you do them all. If you fall behind, keep coming to the sessions and participating. The steps are not linear, but are presented in order maximum effectiveness. Its okay to come back to an earlier step when you have time for it. Offer each other absolute confidentiality Money is one of the most intimate and difficult topics to discuss. You may reveal more about your personal relationship with money here than you ever have before. Let nothing that is said in this group go beyond those present. Note: At no point are group members required to reveal any personal financial data. Have fun!
Table of Contents
Convening Session.......................................................................................................................... 6 Introductory session ...................................................................................................................... 10 Step 1 How Much Money Has Come into Your Life? And What Do You Have to Show For It? ... 13 Step 2 Being in the Present: Tracking Your Life Energy ............................................................... 17 Step 3 Where is it All Going? Monthly Tabulation ......................................................................... 22 Step 4 Three Questions That Will Transform your Life ................................................................. 24 Step 5 Making Your Life Energy Visible: Your Wall Chart ............................................................ 26 Step 6 Respecting Your Life Energy: Minimizing Spending.......................................................... 28 Step 7 Respecting Your Life Energy: Maximizing Income ............................................................ 30 Step 8 Capital and the Crossover Point ........................................................................................ 34 Step 9 Securing Your Financial Independence ............................................................................. 37 Final Session Celebrating Your Achievements ............................................................................. 40
WELCOME!
Youve made an important choice: to transform your relationship with money. This group study workbook will help you start implementing the Financial Integrity Program. Using both this workbook and the Financial Integrity Program Guide, your group sessions will be fast paced, provocative and enjoyable. What is the Financial Integrity Program? The Financial Integrity Program is merelyand profoundlya system for combining ages-old fiscal wisdom with daily personal economic activity. This plan, a whole-systems approach based on simple record-keeping and your own unique life situation, works for anyone who earns or spends money. Singles and couples (with and without children), retirees and students, big earners and those below the poverty line have all been successful in using this program to transform their relationship with money. Why group study? This Study Guide harnesses the creative energy and effectiveness of group learning to help you improve your relationship with money. It will guide your group through a process using exercises, reflection questions, discussion, and homework assignments that will help you integrate the information in the FI Program Guide and put the 9 steps to work in your life. Most people who have implemented this program have done so on their own. The added support of a group can help you get started, but the real work on the program happens as you continue doing the steps on your own, or with your other household members. This workbook is based on three decades of personal experience by thousands of people following this 9 step method. A group study guide for the first six steps was first developed by New Road Map Foundation and tested in corporate settings during the late 1990s, for use with the book Your Money or Your Life, (Dominguez, Robin 1992). It then was adapted to serve small social groups wishing to support each other in their journey to financial freedom. That guide is still available for purchase at www.simpleliving.net. Finally, this version covering all nine steps in was created for use with the Financial Integrity Program Guide, which is available for free at www.financialintegrity.org. By following this Study Guide, reading the Financial Integrity Program Guide, and doing the homework assignments, you will begin to implement the nine-step program and anchor these key steps in your life. In the process you will: Explore your relationship with money Understand better the relationship between money and work Begin to discover what is enough for you Change habits, and possibly begin making major life changes Here are two keys to making this system work for you: 1. Start.
2. Keep going.
The objective of these sessions is not to finish. The objective is to begin.
Guidelines for Facilitators:

Introduce exercises as directed in this Study Guide. Make sure everyone understands the information presented. Keep the discussion focused on the topic; if people get off track, gently help the group refocus. (For example, say, Thats an interesting idea, but its taking us off the topic. Perhaps you could talk further with someone about it after the meeting.) Make sure everyone has a chance to participate as a speaker and as a listener. Conduct group discussions by going around the circle, giving each participant the option to speak or pass. Or simply open the floor to whoever wishes to speak; as conversation winds down ask if anyone else wishes to speak. Keep track of time, letting everyone know when there is only one minute left for a given exercise. Step out of your facilitator role when its your turn to respond to a discussion question.
CONVENING SESSION
Materials
Bring: The Financial Integrity Program Guide
Goal
Decide how this group will function.
Check-In
Go around the group giving your name, how you found out about this group, and reasons for being here.
Discussion
Decide when, how often, and how long you will meet. Options: meet weekly, biweekly, or monthly (with sessions lasting one to three hours). Decide where you will meet. Keep in mind that money is a very personal topic and your group should hold meetings where people feel comfortable discussing sensitive issues. Set ground rules. Suggestion topics include: confidentiality, dialog method (e.g. passing a talking stick), no cross-dialog, refrain from commenting on each others personal statements. Decide if you will do assignments individually or use longer sessions to allow work to be done during the session. If your group does not have a facilitator, assign facilitation duties for each session at this time. Review the sessions and gain agreement from each member of the group. If your group has more than twenty people, decide whether to split up the group. Groups of eight or more may decide to split up just during discussion portions of each session.
Exercise
Our Relationship with Money Go around the group giving your name again. Give one word that describes your relationship with money. What do you want to gain or change by joining this study group and following the steps in YMOYL? (set your sights high and be specific about your goals)
Assignment
Read the FI Program Guide Welcome! and Introduction sections.
INTRODUCTORY SESSION
Materials
Bring: FI Program Guide. Have Available: Extra Inventory Exercise worksheets
Goals
Prepare for working on money issues get accustomed to talking about money. Get acquainted with other group members.
Check-In
Facilitator reads the following question aloud; go around the circle until everyone has had a chance to respond (participants should avoid commenting on what others say during each sessions opening check-in): Did reading the first parts of the FI Program Guide change your goals for this program from what you stated in the convening session? If so, how?
Key Points
Spending more money does not necessarily equal more fulfillment. Enough is appreciating and fully enjoying what money brings into our lives
Discussion
Go around the room multiple times sharing your responses to this question: When I spend money on I feel
Exercise
Survival or Clutter? (Individual and Group) Individual: First, in the chart below, write down some of your possessions and evaluate them according to the following categories: survival, comfort, luxury, or clutter (refer to the FI Program Guide for a review of the fulfillment curve). Group: Have each group member pick one of their possessions on their list and write it and his or her categorization of it on a common worksheet. After each member has added to the list, have each person in the group make check marks categorizing each item according to their own preferences.
Inventory Exercise
Item Survival Comfort Luxury Clutter
Discussion
What led you to categorize in the way you did? (e.g. I categorized bicycle under survival because I have chosen that as my main transportation method. Or I categorized bicycle under clutter because I never ride mine and it just takes up space.) Take time for personal reflection. How much did the categorization vary within the group? What impact did this exercise have on you?
Question
Does your relationship with money help you feel content, or does it seem to get in the way?
Assignments
Get your Lifetime Earnings report from Social Security to find out how much reported income youve made in your lifetime. The importance of this number will be discussed in the next session. Work on locating records of assets and liabilities: Records of assets property assessments, checking, savings, and retirement accounts, brokerage statements, whole life insurance and annuity policies, appraisal records for hard assets such as jewelry Records of liabilities mortgage balances, credit card statements, car loan and student loan statements, home equity loans, records of any financed hard assets such as funiture
Read Step 1 in the FI Program Guide.
STEP 1 SESSION
HOW MUCH MONEY HAS COME INTO YOUR LIFE? AND WHAT DO YOU HAVE TO SHOW FOR IT?
Materials
Bring: Social Security Administration earnings statement and records of income not reported on your taxes Records of assets property assessments, checking, savings, and retirement accounts, brokerage statements, whole life insurance and annuity policies, appraisal records for hard assets such as jewelry Records of liabilities mortgage balances, credit card statements, car loan and student loan statements, home equity loans, records of any financed hard assets such as funiture Have available: Calculators, web connection if possible, stamps, paper, envelopes for contacting SSA
Goals
Take stock of your financial situation by observing and reflecting on your lifetime income to date, your posessions and your debts.
Check-In
How have you been thinking about money and your relationship to it since the past session?
Key Points
A snapshot of current financial reality will help you get clear about the past and create your new future Debts decrease your net worth You have intangible assets that are not shown in your net worth
Exercise
Calculate your lifetime income (individual) Use the space below to begin listing past employment that would not have been reported to Social Security, such as jobs you had as a youth (eg, delivering newspapers, babysiting, bagging groceries) or jobs overseas. If you have not already done so, write a letter or use the internet ot request your lifetime earnings statement from Social Security. Write down how much money, total, you think you have earned in your life.

Financial Sources: Amount $ $ $ $ $ $ $ $ $ $ $ $ $ Total Lifetime Income (Estimate) $
Group Discussion What other income has flowed into your life besides what is included on your Social Security Administration statement? How do you feel about your Lifetime Income Estimate? What do you think it says about you?
Calculate your net worth Start to fill out your Personal Balance Sheet, estimating for those items that you do not have detailed information. Use the space below to begin listing your assets and liabilities. Take a mental walk through your house and estimate the re-sale value of stuff categories (e.g. appliances, cars, electronics.) Etimate your net worth.

OWN Liquid Assets ($) (+) Cash Value $ $ $ $ $ $ $ $ Hard Assets (stuff) (+) Cash Value $ $ $ $ $ $ $ $ $ $ $ Total Own $_________ Total Owe Liabilities OWE (-) Cash Value $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $_________
Personal Financial Net Worth: Assets Liabilities = $_______ Group Discussion What categories did you come up with to inventory your assets? What images or thoughts came to mind as you walked through your house?
Discussion
How did it feel to see how much money youve earned, and then to look at your net worth? What decisions have you made in the past that led to this result? What do you hope this program will do to affect your balance sheet in the future?
Assignments
If the group desires, members can take responsibility for finding the value of common material possessions such as books, appliances, and furniture. Members can share these figures to help each other figure their worth of material assets. Look up stories, tools and examples, and resources related to Step 1 at www.financialintegrity.org If you havent already, write to Social Security for your earnings record statement. When you have all the relevant information, upate your lifetime earnings estimate. If you havent already, begin your inventory. When you have completed your inventory, be sure to update your material assets estimate. Find data that you will use in the next session records of all forms of compensation from your current job, including health insurance, company cars, matching retirement plans, etc. Read Step 2 in the FI Program Guide before the next session.
STEP 2
BEING IN THE PRESENT: TRACKING YOUR LIFE ENERGY
Materials
Bring: Paycheck stub or other record of income for the last week, month, or year Records of other income including health insurance reimbursements, company cars, and other work compensation, payments from trusts or government programs Have available: Cost of driving per mile as estimated by the Internal Revenue Service or American Automobile Association. Estimated costs of common work-related expenses such as dry cleaning and meals away from home.
Goals
Calculate your Real Hourly Wage (RHW) and convert it to Life Energy Create a method for tracking your daily flow of money.
Check-In
Do you feel any differently about money after completing the exercises in Step 1? When doing the lifetime earnings work in step 1, how much of it was from paid employment vs. other revenue streams?
Key Points
You exchange your time (life energy) for money, and when you spend money, you are trading your life energy. Employment (having a job) has both benefits and costs. Tracking your spending will help you become aware of how youre spending your money (your life energy).
Question (individual exercise)

Check the following statements that you feel are true about money or have felt or said at some point. The root of all evil A measure of one's worth in the world A way of impressing others A measure of one's feeling of self worth Not a nice subject to talk about A means of proving myself to others A tool of political oppression A means of buying freedom A cause of pain and suffering Always there when I really need it A way of feeling superior to others A way of keeping me separate and different than others A tool to solve my problems A reward for good behavior For buying the necessities of life Something I have to earn for it to be of value. Something I feel guilty spending A measure of social rank Something I enjoy giving away Not important Dirty Scarce Abundant The cause of divorce Slippery stuff A means of security Happiness Very difficult to get Very difficult to keep Hard to manage A means to an end An end in itself Fun to spend Something I don't deserve A means of exchange Something I try not to think about Something I feel guilty having Something I try to do without Insurance for the future Hot stuff - burns holes in pockets A means of buying love For having fun with
Discussion
Think about the role models from your childhood. What were their different ideas about money? Which one did you tend to pattern yourself after? Which one did you rebel against? What does money mean to you? What are some of your personal beliefs about money? What does our culture tell us about how and why to spend money?
Exercise
Calculate your Real Hourly Wage (individual exercise) Using the chart below, calculate your Real Hourly Wage. Decide whether your math will be based on a weekly, monthly, or annual basis. Be sure to include the tangible information from your list of benefits and expenses.
Real Hourly Wage Worksheet

Caculated on an ______ Basis Gross pay (nominally $______/hr) Income Work-related benefits (value, if purchased privately) $/______ $ +$ +$ +$ +$ +$ Work-related expenses (e.g. Income & Payroll Taxes) -$ -$ -$ -$ -$ -$ -$ -$ -$ $ _________
Adjusted Income: Work hours nominally, per (year, month, or week) Time benefits (e.g. paid time off)
Additional work-related time expended (e.g. unpaid overtime) + + + + + + Adjusted Time: (Adj. Income Adj. time) Real Hourly Wage $__________ ________ hours = $
Every $___________ spent represents one hour of life energy spent.

Discussion
When you calculated your real hourly wage, what was your biggest insight? How do you feel about the list of benefits versus the list of expenses associated with your job? As you become aware of hidden job-related costs, can you see areas where you could reduce or even elminate expenses immediately? How does the idea of a REAL hourly wage impact your thinking about your current employment? Future employment?
Questions (Individual Reflection)

How do you think keeping track of your expenses might affect your buying habits? There are many ways to track your money inflows and outflows. Depending on your personality one may be easier than another. Considering your personality, what method do you think would work best, what would be more difficult? What sort of expenses do you pay with your credit card? How do you (will you) track credit card purchases?
Exercise
Prepare for life energy tracking Write down items you usually buy. Beside each item write how you normally pay for it and how you intend to keep track of it (eg, check register, pocket or purse notebook, collect receipts).
Tracking Plan
Expense Item Usual Amt. $ $ $ $ $ $ $ $ $ $ $ $ $ How I Plan to Track It
Discussion
What does money = life energy mean to you? How is this awareness useful to you? How do you think most people in your social or family group make financial decisions? What would it feel to act differently than the normal way people deal with money?
Assignments
You may want to track time you spend on work-related activities for a short period of time, and then revisit your Real Hourly Wage calculation. The group may want to divvy up different tracking methods for a group experiment on how different methods work. Look up stories, tools and examples, and resources related to Step 2 at www.financialintegrity.org If you havent already, begin tracking your spending. Read step 3 in the FI Program Guide before the next session.
STEP 3
WHERE IS IT ALL GOING? MONTHLY TABULATION
Materials
Bring: Your tracking records. Whatever tools youll use to create your monthly tabulation laptops, accounting or spreadsheet software, graph paper, notebooks, etc. Have available: Graph paper, computer(s) w/spreadsheet software, calculators
Goals
Create categories to summarize monthly financial activity Translate this spending into life energy using your real hourly wage
Check-In
If you completed or updated your RHW calculation since the last session, how do you feel about the results? What has worked well for you this past week in tracking your spending? Where have you had difficulty? What was most exciting or eye-opening for you in tracking your expenses? If, in tracking your expenses, you discovered a gazingus pin, tell the group about it.
Key Points
Your money flow represents what you do with your life energy. Monthly income and expense categories should reflect what you want to pay attention to in your financial life. Tracking your spending is not about deprivation. As opposed to budgeting, its about increasing awareness of your real needs and patterns, which will naturally re-align your money with your financial goals and personal values.
Question
In what areas would you feel better spending more money? Less money?
Discussion
Have you ever made a budget? If so, have you kept to it? If you have used a budget in the past, how has tracking your expenses compared? How much time do you spend monthly on managing your personal finances? Include trips to the bank, online banking, prioritizing and paying bills, meetings with a financial advisor or tax accountant, and so on.
Exercises
Create your monthly tabulation (individual) Create categories that represent your spending and group your expenses in meaningful ways. Assign each expense to a category and sum the totals for each category. Translate categories to life energy by dividing the category total by your real hourly wage from step 2. There are examples of monthly tabulations in the FI Program Guide and online to help you create your own categories. Group members can help each other categorize and set up tables or spreadsheets. There is no right way to set up your monthly tabulation just do what is easiest and makes the most sense to you. Be sure you break up lumped transactions for example, each item included in a credit card payment should be assigned to its appropriate category, and finance charges put in a separate category from those things purchased with the card.
Discussion
Share any insights you had while designing your Monthly Tabulation form. Did you have any difficulties or questions deciding which expenses fit into which categories? Did your total in any expense cagtegory surprise you? What category? Was the total higher or lower than you expected? What are some of the gazingus pins in your life?
Assignments
Continue tracking your spending. Look up stories, tools and examples, and resources related to Step 3 at www.financialintegrity.org Create meaningful categories and finish creating and updating your monthly tabulation. Read Step 4 in the FI Program Guide before the next session.
STEP 4
THREE QUESTIONS THAT WILL TRANSFORM YOUR LIFE
Materials
Bring: Your monthly tabulation and RHW figure. Have available: Graph paper, computer(s) w/spreadsheet software, calculators
Goals
Add the three questions to your monthly tabulation.
Check-In
How is tracking going? Did you have trouble completing categories? Have you had any insights since completing the monthly tabulation?
Key Points
All activity happens for a purpose it reflects some value and/or achieves some goal. Aligning actions with purpose in a conscious way increases the chances for success and fulfillment. Tracking and evaluating your financial activity leads to more awareness and knowledge, thus increasing your options. This results in more satisfying choices not deprivation. Jobs can cost us more than just our time. Its reasonable to evaluate how effective they are in improving your financial situation.
Questions
What questions do you ask yourself before deciding to purchase something? If you didnt have debt, how would this affect your monthly tabulation?
Discussion
Imagine not having to work for an income. What would your life be like? What do you think having a life purpose means? Does that term apply to your life?
Exercise
Practice asking the three questions (individual) Write down two items you bought this month, and calculate how much life energy you spent for each. Apply the three questions to each item. Q1. Did I receive fulfillment and satisfaction in proportion to the life energy spent? Q2. Is this expenditure of life energy in alignment with my values, goals and life purpose? Q3. How might this expenditure change if I didnt have to work for a living? Share your findings with group.
Exercise
Add the three questions to your tabulation For each category in your tabulation, fill out your answers to the three questions for that category. Discuss any insights you have with the group.
Discussion
In your experience, how do the three questions relate to each other? In what ways have we let our financial lives define who we are? How would you define financial independence for yourself?
Assignments
Continue to track your expenses and evaluate your categories with the Three Questions. Make a conscious effort to ask the 3 Questions before purchases and note your reactions. Look up stories, tools and examples, and resources related to Step 4 at www.financialintegrity.org Read Step 5 in the FI Program Guide.
STEP 5
MAKING YOUR LIFE ENERGY VISIBLE: YOUR WALL CHART
Materials
Bring: Monthly tabulation, tools youll use to create wall chart Have available: Graph paper & pens, spreadsheet software
Goals
Create a wall chart to graph your financial progress over the long term.
Check-In
Have you stopped yourself on the verge of buying something this week, and realized it wouldnt meet your new criteria?
Key Points
Your wall chart will be a great reminder of your progress and a motivator to keep tracking your everyday expenses. Plotting and posting your Wall Chart where you will see it every day will help you focus on your overall progress.
Questions
If you were to create a picture explaining your financial life, what would it be like? How would you feel about hanging your chart in your living room? In your bedroom? At your workplace?
Discussion
What are your financial goals and how do you get feedback about your progress?
Exercise
Create a wall chart Get large graph paper and make your wall chart. Enter your first months income and expenses (include debt or make a separate chart for it). Bring laptops, discs, etc. Follow-up Questions: How do you feel about having your financial life protrayed visibly? What are you looking forward to in the years to come from this program?
Exercise
Values clarification Take one item from the Survival Clutter exercise from the introductory session and share with the group what value that item and its categorization speaks to for you. For example, one person may see fishing gear as clutter, while another person may see that fishing gear as representing their value of spending time outdoors.
Discussion
How does asking yourself Question 1 (fulfillment in proportion to life energy) affect your spending? How does asking yourself Question 2 (alignment with values and goals) affect your spending and earning? How does asking yourself Question 3 (financial independence) affect the way you think about your current work situation?
Assignments
Keep evaluating your financial activity with the Three Questions. Note the impact on your spending. Watch the flow of your life energy by updating your wall chart each month. Look up stories, tools and examples, and resources related to Step 5 at www.financialintegrity.org Read Step 6 in the FI Program Guide before the next session. Group members may wish to bring resources on reducing expenses to the next session.
STEP 6
RESPECTING YOUR LIFE ENERGY: MINIMIZING SPENDING
Materials
Bring: Monthly tabulation. Resources on reducing expenses.
Goals
Apply creative thinking to reduce expenses. Get maximum value for any life energy you do expend.
Check-In
Did you have any troubles setting up your wall chart? What have your reactions been to seeing your wall chart since the past session?
Key Points
Minimizing spending is not about deprivation. It is about getting the most value from your life energy, and getting greater fulfillment and satisfaction in alignment with your values and goals. You can decrease spending through conscious elimination of unnecessary expenses and conscious consuming of necessary expenses. There are many non-monetary ways you can get your needs met and create fulfillment.
Questions
Whats the last item you used something until it actually wore out?
Discussion
In what ways might you decrease your spending and simultaneously increase your fulfillment in relation to these aspects of your life: o o o your home your body your family or community
Exercises
List specific ways you could change your spending to Get highest value from your money: Consciously eliminate expenses:
(Dont forget to include ways you can increase your RHW by minimizing work-related expenses.) Imagine not buying anything in a way that adds debt expenses (interest, finance charges) to your tabulation. How would your buying patterns have to change?
Discussion
When you think about decreasing your expenses, are there expectations or rights that feel threatened? Name two areas/categories in your monthly tabulation columnsthat are marked with dissatisfied symbols. Ask the group to help you strategize a change of approach for each.
Assignments
Keep looking for opportunities to save, whether it is eliminating an expense or spending more wisely. Observe how this affects your attitudes, your behavior, and your fulfillment. Observe how this affects your monthly tabulation and wall chart. Look up stories, tools and examples, and resources related to Step 6 at www.financialintegrity.org Read Step 7 in the FI Program Guide before next session. Group members may wish to bring resources on careers, job hunting, and salary setting to the next session.
STEP 7
RESPECTING YOUR LIFE ENERGY: MAXIMIZING INCOME
Materials
Bring: Spending record and monthly tabulation Resources on careers, job hunting, and salary setting.
Goals
Begin to think about your paid employment in terms of maximizing your income. Start thinking about maximizing your fulfillment by integrating your life energy, values, and purpose with your work.
Check-In
Did you change your spending or earning habits since the last session? If so, how?
Key Points
The hours left in your life are a finite resource, not infinite. Maximizing your income is a way to respect your life energy. You can maximize your fulfillment by integrating your life energy, values and purpose with your work. You will be working for a finite period of time.
Questions
How big is yours? How would you feel if someone asked you that about your paycheck? What is your evaluation of what you are putting into your job? My absolute best total integrity I only do what I have to do to keep my job I take as much as I can and give as little as I can.
Discussion
Which of the following statements most closely describes to you the primary purpose of paid employment? Share your thoughts with the group.
For prestige, status, power and respect To express my creativity To be successful in the world Because of duty or public service For enjoyment, stimulation and learning Because of social or family expectations Because its my role/identity To interact with others, to have social connection and a sense of cooperation To give me a sense of purpose and contribution So I dont have to stay home and take care of the kids To have something to do, to structure my time For the benefits (e.g., health insurance) To earn money (to pay creditors, save for the future, sustain my current lifestyle)
Exercise
Paid Employment Estimate how many hours you have left until you are retirement age. Estimate how many of those hours you expect to spend on paid employment. Check whether your paid employment supports or hinders you in the following areas of your life: Helps Hinders personal relationships (family, friends, neighbors), personal growth (emotional, intellectual), inner peace (spiritual), health (physical), contribution to society (community, planet).
Discussion
What did you think or feel after estimating the amount of hours you have left in your life and how many you would spend on paid employment? How attached are you to your job? Is your job your identity? If you didnt have a job, how would you describe yourself? If you didnt need a paycheck, what would you be doing?
Exercise
Your Income Alignment Besides income from work, what other sourcse are providing you income? To create an accurate tabulation of your income, be sure to include all sources. What is your evaluation of your current real hourly wage in relation to your income goals for your retirement date? Not enough OK but could be better Just the right amount More than I need I can retire earlier.
What is your evaluation of the current level of effort youre putting into your job? My absolute best total integrity and value Its a job I just do what I have to I take as much as I can - give as little as I can
What kinds of obstacles have you run into that keep you from maximizing your income? List some specific ways you can consciously maximize your income, in alignment with your health and values.
Discussion
You can choose how long you work for pay. Does knowing that paid employment is only for a finite period of time make you feel different? How? How would it feel to go to work keeping in mind the sole purpose of paid employment is to get paid? How might that change your work day? How would people your boss, your customers, your employees react to you if they knew you were there purely for the love of it because you didnt need the income?
Assignments
Keep looking for opportunities to maximize your income in alignment with your health and values, whether through raises, additional employment, or a change in employment. Observe how this affects your monthly tabulation and wall chart. Observe how this affects your attitudes, your behavior, and your fulfillment. Look up stories, tools and examples, and resources related to Step 7 at www.financialintegrity.org Read Step 8 in the FI Program Guide before the next session. Group members may wish to bring resources on investing to the next session.
STEP 8
CAPITAL AND THE CROSSOVER POINT
Materials
Bring: Wall chart, monthly tabulations Resources on investing. Have available: latest Consumer Price Index, inflation rate figures, and definitions.
Goals
Understand the crossover point and begin to think about savings and investments. Begin to understand the concept of inflation and learn how to calculate a personal inflation rate.
Check-In
Have you had any further thoughts on maximizing your income or integrating your life energy, values and purpose with your work? Have you approached work differently since last session?
Key Points
By using your savings as investment capital, you can earn income separate from employment status. Once you have enough predictable, dependable income from your investments to cover your expenses for the foreseeable future, you do not have to work. You are financially independent. Inflation is a generalized concept that does not necessarily define specific experience. Personal spending trends trump national inflation rates.
Questions
Describe what financial independence would be like for you in terms of your work and your lifestyle. What shifts would you make in expenditures of money and time?
Exercises
Charting Investment Income Add your investment income to your wall chart. To do this, you must know the amount of capital you have invested and the rate of return (interest rate) on your investment. (If you do not currently have any capital and return, do this exercise anyway on a practice sheet, using the savings/capital balance that you hope to have within the next year.) Use this formula: Capital x current rate of return / 12 months = first month investment income. For example, $1,000 in a savings account paying 4% interest will give you $3.33 the first month (1000 x 0.04/12). Compound Interest Now calculate what that investment income will become over time. A spreadsheet or calculator with financial functions may be useful for this step. Several web sites also calculate compounding interest given an initial balance and interest rate. Projecting out just two steps is enough to get the hang of the process. Step one was to project the first months income as explained above. Now take that income, add it to your capital, and project your compounded interest income: (Capital + previous month investment income) x current rate of return / 12 months = investment income For example, that $1,000 savings account will give you an extra penny the second month you have it invested. (1000 + 3.33) x 0.04/12 = 3.34). Increasing Your Capital Dont forget that every month you are working you will likely add to your capital by decreasing your expenses and maximizing your income, resulting in more savings to invest! You can add that projected savings into the formula this way: (Capital + previous month investment income + previous month savings) x current rate of return / 12 months = investment income Projecting Your Independence Income Repeat the calculation above until the capital equals your monthly expenses. This is probably best done with a spreadsheet using formulas, a financial calculator, or a website that calculates compounding interest over a period of years. If you are currently in debt, you may want to extend the calculation until you reach your current amount of debt instead (balance pay off). Pencil in Your Projected Independence Income and Projected Monthly Expenses You can see that with both the power of compound interest and increased savings through implementing steps 6 and 7, your investment income line can rise noticably on your wall chart into the future, until it crosses over your expense line.
Question
Other Factors As you update your monthly tabulations over time, you will be able to calculate your personal inflation (or deflation) rate, and project out trends based on present reality and expected life circumstances. How might your family structure and responsibilities change over the course of the rest of your life? Economic impact of those changes? Revisit your Real Hourly Wage calculation how might not working affect your finances?
Discussion
Describe how your thinking is different now than before learning this step, regarding savings, capital investment, and financial independence? How would you think your personal inflation rate compares to the General Inflation Rate? How does it feel to know you can reliably estimate a date when youll be financially independent?
Assignments
Calculate how much you would need to set aside to cover six months worth of expenses if you didnt have employment income. Assign persons to present next session any basic information on fixed income investment vehicles which they are able to gather. Look up stories, tools and examples, and resources related to Step 8 at www.financialintegrity.org Read Step 9 in the FI Program Guide before the next session.
STEP 9
SECURING YOUR FINANCIAL INDEPENDENCE
Materials
Bring: Wall chart, monthly tabulations Resources on investing. Have available: current issue of the Wall Street Journal
Goals
Begin to choose your personal criteria for investing Begin to learn about investment vehicles
Check-In
Has your attitude toward work, savings, or investing changed since learning about the crossover point?
Key Points
Anyone from any walk of life can achieve financial independence. The foundation of financial independence is investing capital for the long term in secure investment opportunities. Disintermediation means taking responsibility for your own investment decisions and activity.
Questions
How much money do you currently have saved for a rainy day (easily accessible without penalties)? How many months of expenses do you feel YOU need to have a comfortable cushion? Did you consider financial independence a possibility when you started the program? Do you feel any differently about that as a goal now?
Exercise
Find the Rate of Return Using the Wall Street Journal, find the current rate of return for different investment vehicles (T bills, I bonds, local municipal bonds, securitized loans.) Have persons present the information on fixed income vehicles which they have gathered in the past two weeks to the group. Allow time for some discussion (Mutual funds, annuities, international bonds, etc.)
Exercise
Investing Your Capital There are literally new opportunities for invesment being invented every day. Remember that the goal of Step 9 is to become knowledgeable only about those vehicles that are appropriate for you. While there are few investment vehicles that rate high for all criteria, ranking your criteria will help organize your thinking, so you can eliminate those vehicles that clearly do not meet your personal priorities. Weight your invesment criteria according to how important each characteristic is for you. Are there any other criteria you would use? Add those criteria to your list.
Investment Plan Criteria Weighting

9 Step Criteria Alignment with personal values, goals & life purpose Safety of capital invested Guaranteed stable ncome Liquidity without penalty Minimal financial costs (fees, load) Minimal management time Long term capacity Other: Importance (5=very important, 1=not as important
Exercise
Make a list of specific ways to invest your capital that interest you. Evaluate these investments based on the criteria given in step 9 of the FI Program Guide, and of course, with the fulfillment criteria you are now applying to all your financial activity.
Applying the Criteria

Investment Vehicle Aligns w/ values Safety Stable Income Liquid Long Term Min. Costs ($) Min. Costs (time)
Discussion
How do you feel about the idea of being responsible for your own capital and investment decisions? Does it make it less daunting knowing that you only need to become knowledgeable about vehicles that meet your criteria? What do you plan to do next week to get started?
Assignments
Become knowledgeable, adept, and sophisticated about investment opportunities. Look for investments that are in alignment with your values, goals and other criteria. Put each and every Step into action and make them a part of your daily life. Periodically, review the whole program.
FINAL SESSION
CELEBRATING YOUR ACHIEVEMENTS
Materials
Have available: Feedback forms
Goals
Make commitments for changes in behavior Recognize and celebrate your acheivements
Discussion
What have you learned in this course? Have you already changed how you handle your money? What changes to you want to make in how you handle your money? What will your challenges be? What strengths can assist you?
Celebrate! If you wish to share this knowledge with others

There are many ways you can participate in the ever expanding network of FIers. Please check the Financial Integrity wiki at www.financialintegrity.org. There are many ways to spread the word including leading another group, answering questions on the wiki, helping administrators maintain the wiki, or numerous other tasks. Email us at info@financialintegrity.org if youd like to get involved. Thank you!
FEEDBACK FORM
We are continually refining, adapting, and adding to the materials we provide for free use on our website www.financialintegrity.org. Your feedback will help us in that process and will benefit the others who follow in your footsteps. 1. How did your group form? Check all that apply: __ Book club __ Follow-up to a public talk __ In the workplace __ Adult education class __ Religious or spiritual group __ Informal group of friends __ Family members __ Follow-up to another group or class. What group/class? __ Other: 2. __ Check here if you used this Group Study Workbook as an individual working alone. 3. What format did your group use? Twelve one-hour sessions every week, twelve two-hour sessions with time to complete the assignments, or some other format? 4. How many people were in your group at the beginning? How many at the end? 5. If your group formed at work: What business or organization do you work for? Did your employer sponsor the group? Did your employer donate time? space? materials? How was the group initiated? (e.g., Human Resources, Employee Assistance, Work/Family Life, Continuing Education, department head, employee) Did any problems arise related to meeting in the workplace? If yes, what? How did you deal with them? 6. How valuable was the group study process to you? 7. Please rate the Group Study Workbook overall: Best features: Features that need improvement: Very Great Somewhat Good Fair Not at all Poor
8. Were the homework assignments clear? Explain:
Always
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9. Please rate the value of the Introductory Session: Great Did you have enough time? Too much? Did it get people engaged in the process? Suggestions for improvement:
Good
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10. When/if you facilitated a session, were the guidelines and instructions adequate? Suggestions for improvement: 11. Please note any particular exercises or discussions where you ran short of time: 12. Were you able to complete the homework assignments? If no, what problems arose? 13. What is the greatest value to you of the nine-step Financial Integrity program? 14. Are you motivated to continue working with this program? Yes Why or why not? No Yes No
Yes No
15. Other comments about your experience with the study group and/or Group Discussion Guide:
Optional: Name Address Phone Email Date
Send to: New Road Map, P.O. Box 1363, Langley, WA 98260 or info@financialintegrity.org You may send this individually or your group may send all of its forms together. Thank You!
Financial Integrity Transforming Your Relationship with Money
Instructor Guide
The Financial Integrity Instructor Guide was created and published in 2008 by The New Road Map Foundation Creative Commons Attribution Share-Alike 3.0 US License, some rights reserved. The New Road Map Foundation is a 501(c)3 nonprofit organization that supports people in transforming their relationship with money and aligning their financial choices with their values. Tax deductible contributions to support this work can be mailed to: PO Box 1363 Langley, WA 98260 www.financialintegrity.org
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 United States License. This means you are welcome to use, distribute, and make adaptations and derivative works, with the following restrictions and attribution added to any work you use or create: This work is licensed under Creative Commons Attribution Share-Alike 3.0 US License. It is based on the Financial Integrity materials developed by the New Road Map Foundation, available for free at www.financialintegrity.org The enclosed material is based on the original seminars Transforming Your Relationship with Money and Acheiving Financial Independence, produced by the New Road Map Foundation and performed by Joe Dominguez from 19841986. The nine-step program in this curriculum was later also detailed in Your Money or Your Life (Penguin Books, 1999) by Joe Dominguez and Vicki Robin. In no way does this document grant use of anything written under the Your Money or Your Life title, which is under private copyright with all rights reserved.
THE FINANCIAL INTEGRITY INSTRUCTOR GUIDE | PAGE 2
The Financial Integrity Instructor Guide
Use this guide to faciliate discussions while using The Financial Integrity Program Guide. Refer to The Financial Integrity Instructor Guide Visuals for sample flip charts to use throughout the seminars.
Table of Contents
Welcome!......................................................................................................................................... 5 Getting Started................................................................................................................................. 6 Facilitation Skills .............................................................................................................................. 8 Instructional Methods .................................................................................................................... 10 Preparing to Lead a Seminar......................................................................................................... 13 Seminar Schedule ......................................................................................................................... 16 Handouts ....................................................................................................................................... 19 Visuals and Presentation Notes .................................................................................................... 29
WELCOME!
Welcome Instructors, Coaches and Presenters!

We are so pleased that you are interested in spreading the word about this amazing method of personal financial transformation. Starting in the early 1980s people have been introducing this 9 step program to audiences with amazing success. You are now joining an impressive lineage of people with the generosity to share their enthusiasm and experiences to help others develop a stress-free, fulfilling relationship with money. That lineage started with program originator Joe Dominguez. Recordings of his original seminars are still available in the audio course Transforming Your Relationship With Money by Joe Dominguez (1986). Joes was a unique personality, and his seminars stressed his underlying spiritual/philosophical mission. We strongly recommend that you listen to the original seminar before presenting one yourself it will inform you, give you more insight into the origins of the program, and inspire you to find your own voice. We created this professionally developed Instructors Guide so you can have all the nuts and bolts of a successful curriculum at your fingertips now you can focus on customizing the presentation for your audience, your style, your interests, and your strengths. Have fun! The New Road Map Foundation Seattle, 2008
GETTING STARTED
Financial Integrity Seminar
As an organization, New Road Map seeks to empower people to experience fulfillment, integrity, and freedom by transforming their relationship with money. The FI seminar presents the core materials in an environment conducive to participant learning, in alignment with the NRM mission.This seminar offers the concepts and the tools of the Financial Integrity program. This document intends to provide everything you need to conduct an effective seminar. This is a toolbox to help you present the Financial Integrity (FI) program, stay on track, and stay on message. The suggested FI seminar is structured in three sessions, three hours each. Schedules, visuals, and instructor notes are at the end of this document. We recommend that you present sessions at least one week apart. Sessions could also be presented over a weekend. Ideally, a session can accommodate 12 students, but you can adjust the presentation to accommodate a larger group. The information contained in this document will help you plan and present an FI seminar. You may choose to structure your presentation in a different way than is outlined here. Thats great! Use this Instructor Guide to help make your own presentation a success.
Instructors
Seminar instructors have used the FI program themselves for a period of six months or more. They are able to tell personal stories of their experiences applying the concepts and practices to their individual circumstances. Ideally, instructors want to share what has helped them. Instructors may be coaches, facilitators, professional educators, or just possess leadership qualities that inspire their audiences. Instructors may charge commensurate with their life energy expended to promote and conduct the workshop, or may present the material for free.
Audience
The seminar audience may be a group of similar-minded people or a diverse group, depending on the location and reason for the presentation. Initially, many people will attend a seminar for at least one of these reasons: Information become more informed about objective concepts of money Debt how to control debt, how to diminish debt, how to get out of debt Simplicity how to live more frugally, to be happy without spending more money Fulfillment experience more fulfillment or satisfaction in their life Independence how to become financially independent, find ways to invest responsibly Values learn to align their finances with their values, create more meaning or spirituality in their life
Seminar Objectives
The objectives of the Financial Integrity Seminar include: Present FI concepts, goals, and actions. Facilitate student learning by sharing specific examples and stories. Provide information and exercises for multiple learning styles. Provide information about resources. Reinforce FI ideals throughout the program.
Participant Activities
Participants should attend all three sessions, participate in discussions, and do at-home exercises. Participants will provide feedback on the course material, instructor effectiveness, and overall satisfaction. Participants will have a chance for deeper learning and true transformation through regular reflection. Each Step includes reflection questions to guide this journey. Encourage participants to track their feelings and thoughts, as well as their income and expenses. Some may choose to share their insights during the sessions.
Instructor Resources
The Financial Integrity web site [www.FinancialIntegrity.org] posts many resources for instructors and students. Check the web site (www.financialintegrity.com) for an accurate list. Here is a sampling: FI Program Guide FI Instructor Guide FI Small Group Discussion Guide Success stories Case studies Sample worksheets Blank worksheets FAQs Books and web-based resources Course Evaluation forms
FACILITATION SKILLS
Respect Your Audience
Respect the knowledge, experience, and wisdom of the participants. Most people will come to the program with some ideas about money and their life. Some will be more informed and educated than others, but encourage all people to contribute to the discussions, and they will retain the information longer. Use as many examples from the group as possible. Making the concepts more personalized helps keep people engaged. Acknowledge the difficulty of some of the steps. Ex: Tracking can seem like a time-consuming and uncomfortable new chore. Emphasize that the benefits will make the effort worthwhile. Remind people of their goals, to help them stay motivated and focused.
Encourage Open Communication

Ask open-ended questions. Avoid yes/no questions. Listen without judging the speaker or making assumptions. Ask follow-up questions for clarification or for additional insights. Establish behavioral norms of respect and openness. Exercise patience by giving everyone an opportunity to speak and be heard. Practice active listening by listening without judgement, and thinking about what the person is saying. Be open to new ideas, challenges, thoughts.
Create a Co-Learning Environment

Everyone can learn from each other. Model the behavior that you are trying to teach: positive, open, and welcoming of new ideas. Show appreciation for suggestions from the group. Acknowledge individual contributions. Use problems, observations, and hypothetical situations to help people try new ways of thinking. Allow plenty of interaction time for participants either by discussions with popcorning (see page 14) and brainstorming or small group/one-on-one discussions. Encourage sharing ideas for problem-solving have people in the group make suggestions add more only as needed. Pair people for 1-on-1 discussions so they get to know each other. Provide resources online and in print (lists). Find out if there are active study groups in the area.
Sharing Your Experience and Expertise

Tell stories about when you first started, your personal challenges, your successes. Show some of your own charts. Talk about your values, goals, and purpose. Tell how they relate to your FI activities. Share helpful hints, solutions, and recommendations during the course. Use personal stories to make the concepts connect with reality. Use examples showing how individual lives have transformed into a life easier around money. FI is a new way of thinking, and every step can challenge someones beliefs about money and affect not only their own personal abilities to attain their financial goals, but improve other areas of life in the process. Throughout the seminar, emphasize the interconnectedness of the steps. For example, once youve discussed enough, connect that concept to every step going forward.
Managing the Session

Use a variety of presentation methods to engage different learning styles. Keep the examples simple the numbers are not as important as the concepts and the process. Encourage participation. Use open questions with popcorning, to allow quieter people to respond when they feel comfortable. Be enthusiastic. Give positive, appreciative, non-judgmental feedback. Use affirming language avoid dont phrases. Note the pacechange the speed and level of the discussion as appropriate. Keep the discussion on track. Summarize discussions succinctly. Respect peoples time: start on time, come back from breaks on time.
Transition from Breaks

Use one visible clock for timing start, end, and breaks. Use a chime or bell to get peoples attention when it is time to start.
Create a Concise End to the Session

Briefly review the material. Hand out summary information. Ask What questions do you have about todays session? Post unanswered questions on the parking lot. Thank people for participating.
INSTRUCTIONAL METHODS
During a seminar, there are many opportunities for discussion and exercises. This Instructor Guide provides a framework using methods for the whole group (ex: popcorning), small group work (ex: discussion and report out), 1-on-1, and individual. While we recommend certain strategies in the visuals notes, as the instructor you are responsible for reading your audience to determine the most appropriate method in the moment.
Learning Structures
Lecture One-on-one (1-on-1) sharing Small group discussion or exercise Report out (from small group work) Large group activity or discussion
Recording
The phrase recording means writing on flip charts. Some instructors refer to this as charting. Because of possible confusion with FI charts (such as the Wall Chart), we use the terms record and write instead of chart. For brainstorming or recording lists of ideas: Use alternating colors, if possible. Use dark or bright colors. Avoid red and light colors (theyre difficult to read from a distance). Write down exactly (or abbreviated) what the person says. If the person is not concise, wait until they finish talking, and ask them to summarize for you in just a few words. You can also suggest a few words to describe their idea, ask them if its ok, then write it down. While a discussion is going on: Try to capture the essence of the points in key words. Ask for clarification if you dont know what theyre talking about, or need to summarize. Check in periodically to ensure youre capturing the essence of the discussion.
Parking Lot
Prepare a flip chart ahead of class each day. Label the chart Parking Lot and post it near the front of the room, on a side wall so it is not distracting, but is accessible to participants. During the first session, explain that the Parking Lot is for questions that come up during the day that you will be addressing in later in the session or the course. You can also use the Parking Lot to start the session ask the group what questions do they have on their mind record those questions (briefly). At the end of the session, go through the questions with the group to ensure that you have addressed the questions. You can use this as a form of re-capping the session. If there are questions for the next session, just indicate that you will get to those then (if that is true).
T H E F I N A N C I A L I N T E G R I T Y I N S T R U C T O R G U I D E | P A G E 10
At the end of the course, if there are still non-answered questions, ask the group for suggestions on resources to address those issues.
Post Visuals (Flip Charts)

Make use of the wall space in the room plan to post the flip charts in sequence around the room, so that by the end of the seminar you have posted Step 9 near the beginning (the 9-circles exercise, Fulfilment Curve, and Step 1), showing the cyclical nature of the program. This is also useful in reviewing or stressing various steps during the seminar. While instructors may use slide shows as a presentation tool, we encourage you to mainly use methods that allow participants to easily review concepts and group work, and that encourage a more active participation. So in this guide we refer to flip charts as the visual aids.
Popcorning
When you want to get ideas from the group, popcorning is a great way to get many people to participate, without pressure on any one individual. Popcorning = 1 idea per person, 1 person at a time. People raise their hands. The facilitator points to 1 person, hears the idea, repeats it to ensure that everyone heard, and moves on to another person, and so on. If you need to capture the ideas, its helpful to have 1 or 2 other people charting for you. Explain this method quickly the first time, such as Id like to hear from as many people as possible so, one idea per person, please raise your hand when youre ready and Ill call on you and well just popcorn around the room. Okay, what ideas do you have? Lets start with ---. The next time you want to use this method, you can just say, Lets popcorn for ideas and everyone will understand your intention.
Brainstorming
Post the rules: All ideas will be recorded. No judgment! The more ideas the better. Popcorn one idea per person at a time Record ideas one at a time using the persons exact words: encourage short phrase ideas; request permission to paraphrase or change the words for clarity (if necessary).
Small Group Work and Report Out

When you want your participants to have a more in-depth conversation about a topic, small group discussions are one way to accomplish that. Ask people to cluster into small groups (such as 3-5 per group, depending on the size of the whole group). If participants are at tables, you can ask them to discuss this at their tables. If the tables are large (8-10 people), just have them split into 2 groups per table. For the report out, the group designates one person to speak for the group. The group decides the main points for reporting. Another person can record (on flip charts), or the report-out person can take notes.
PREPARING TO LEAD A SEMINAR

Calendar Planning
See online resources for sample emails, notes, registration material. This is a suggested calendar your circumstances may require a different plan. 4-8 weeks ahead Draft publicity/marketing materials Develop registration form Send publicity to local calendars, newsletters, library, newspaper, community center, and so on. Get a list of potential participants. Reserve location. Email potential participants. Pre-registration materials 2-3 weeks ahead Review, augment and adapt all materials, according to your purpose and audience. Send confirmation email (or note) to participants welcoming them to the course. Include: - dates/days/times of the sessions - location with directions - your email address and/or phone # - directions on getting started tracking (see website) 1 week ahead Send reminder email (or note) to participants welcoming them to the course. Include dates/days/times of the sessions, location with directions, your email address and/or phone#. Review all materials. Print out the visuals with the presentation notes. Make copies of the handouts. Get supplies. Prepare charts. Day of session Arrive early at the location Set up tables and chairs. Post charts, set up supplies. Make coffee or get water. Set out snacks.
Supplies
Welcome sign (or flip chart). Coffee/tea/water, snacks. Prepared charts see FI Instructor Guide Visuals document. Handouts exercises, sample charts and FI Step summaries Materials: extra pens, scrap paper, white board markers (if needed), flip charts, flip chart markers.
Room Atmosphere
Put up a welcome sign with the name of the seminar. Including these items reaches people through a variety of learning styles: Hang quotes around the room. (See the FI web site for sample quotes). Put copies of cartoons on participant tables. Post articles and cartoons on the wall near the registration area and the coffee table. Have articles and books on a display table.
Room Layout
Arrive early to set up the room properly. Small Group (up to 12). Put chairs in a semi-circle, facing each other, with a white board or flip charts at the front of the circle. Instructor can be part of the semi-circle or to the side. This works well for small groups (up to 10). This configuration encourages more participation and 1-on-1 interactions.
White board/Flip Charts
X X X X X X X
X X
Large Group. If you have a large group (30+ people), use round tables conducive to small group discussions and creating a sense of community. Include multiple flip charts around the room for the table groups to use.
White board/Flip Charts
SEMINAR SCHEDULE
Overall Schedule
This is a high-level view of the 3-session seminar structure. Detailed schedules follow. These are suggested schedules. Adjust as needed. Use the blank columns to note your actual times.The default method is lecture/small group. Use popcorning throughout. Have available prepared visuals and blank visuals (flipcharts), markers, and blue masking tape.
Session One
Instructor PreSession Agenda Arrange facility, prepare handouts, get supplies Introduction Step 1 Step 2 Review
Session Two
Session Three
Review/check-in Step 3 Step 4 Step 5 Review
Review/check-in Step 6 Step 7 Step 8 Step 9 Review Whats Next
Instructor Post-Session
write instructor notes
write instructor notes
post instructor notes on the FI website
Session 1
Session 1 Slides Welcome Announcements Parking lot Ground rules Introduce Yourself Introduce FI 9 circles exercise Money is Fulfillment Curve Inventory Exercise Enough BREAK Financial Integrity Nine Step Step 1 Lifetime income Step 2 Focusing on the present End Session 1 5 min 5 min 10 min 10 min 15 min 15 min 0 min 10 min 5 min 40 min 40 min 10 min 0h 10 0h 15 0h 25 0h 35 0h 50 1h 05 1h 15 1h 25 1h 30 2h 10 2h 50 3h Timing 5 min Elapsed 0h 05 Actual start Actual End Handouts
Session 2
Session 2 Slides Check-in/review Step 3 Monthly tabulation BREAK Step 4 The 3 Questions Step 5 Making life energy visible End Session 2 Timing 25 min 45 min 15 min 45 min 45 min 5 min Elapsed 0h 25 1h 10 1h 25 2h 10 2h 55 3h 00 Actual start Actual end Handouts
Session 3
SESSION 3 Check-in/review Step 6 Respect your life energy Step 7 Respect your life energy BREAK Step 8 Capital & crossover point Step 9 Securing your finan indep Financial integrity summary Whats next? Indep vs. inter-dependence What are your next steps? Tips for success End Session 2 Timing 30 min 30 min 30 min 15 min 30 min 30 min 15 min Elapsed 0h 30 1h 1h 30 1h 45 2h 15 2h 45 3h Actual start Actual end Handouts
HANDOUTS
The following handouts are for participant use after attending the program presentation, to aid in implementing the Financial Integrity program. Refer to the Financial Integrity Program Guide for more samples. You could also hand out copies of each Steps Review and Reflections and Tips for Success.
The 9 Circles Exercise
The Fulfillment Curve
The Nine Financial Integrity Practices
Step 1 Lifetime Income

Financial Sources: Amount
Total Lifetime Earnings
Step 1 Personal Balance Sheet

Own Liquid Assets (+) Cash Value Liabilities Owe (-) Cash Value
Hard Assets
Total Own
Total Owe
Step 2 Being in the Present: Tracking Your Life Energy
Real Hourly Wage

Caculated on an Annual Basis Basic Job Adjustments $/Month Hours/Month = $/Hour
Subtotal Adjustments Real Hourly Wage $ =
Every dollar you spend = the amount of your life energy it took to get it. Every time I spend about $_______ I am trading about an hour of my life energy. When I buy ______ , I am trading _____ hours of my life. The key question: Is it worth it?
Step 3 Wheres it all going: Monthly Tabulation

Monthly Tabulation
Month/Year: __________ Actual Starting Balance Income Wages Interest Other Total Income Expenses Rent Utilities Groceries And so on ... Total Expenses Ending Balance Actual Starting Balance + Income Expenses Actual Ending Balance (at the end of the month) Unaccounted For (Difference between Ending Balance and Actual Ending Balance) Dollars $ ____ Hours of Life Energy These instructions will apply if you are doing your tabulation on paper or spreadsheet. If you are using software or online banking, you may be able to download your data directly into your tabulation. On the first day of the month, add your cash on hand plus current balances of your liquid accounts to find Actual Starting Balance. List all your categories. At end of month, enter category amounts. Add to get Total Income and Total Expenses. Calculate your Ending Balance: Actual Starting Balance plus Income minus Expenses. This is what you should have at the end of the month. At the end of the month, add cash on hand plus current balances of liquid accounts to find your Actual Ending Balance. In each category, calculate Hours of Life Energy Spent: Expense Real Hourly Wage
$_____
$_____
$_____
$_____
$_____
How well did you track? At the end of the month, compare your Ending Balance with your Actual Ending Balance caculation The difference is the total of transactions you may have missed. Next month, see if you can make that amount smaller or even zero!
Step 4 Three Questions to Transform Your Life

On your monthly tabulation, add 3 columns: Fulfillment, Alignment, and Financially Independent. Did I receive fulfillment in proportion to life energy spent? Was this in alignment with my values, goals, and purpose? How would this change if I were financially independent? (i.e., if I didnt have to work for an income?) Use symbols that are meaningful to you.
Monthly Tabulation
Hours of Life Energy Q3 Financially Independent?
Month/Year: Actual Beginning Income Wages Interest Total Income Expenses Rent Utilities ~~ (sample symbols) Total Expenses Month End Actual End Unaccounted(Difference)
Dollars $ ____
Q1 Fulfillment?
Q2 Alignment?
$_____
$_____ $_____ $_____ $_____
Step 5 Making Life Energy Visible: Your Wall Chart

Make a chart. For hand-made charts, use graph paper (at least 18x22) with 10 squares per centimeter or inch. The vertical axis represents money. Create a dollar scale so your first monthly income and expense amounts fall in the middle of the range. The horizontal axis represents time. Use month/year. Plot out the next 5 years. At the end of each month, use dots to mark your monthly income and expenses. Using different colors, draw lines from the previous amounts to the current amounts.Post your chart so you can SEE IT EVERY DAY. Sample Wall Chart
8000 7000 6000 5000 4000 3000 2000 1000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
income expenses
Whats Next? Participation

Put each and every Financial Integrity Step into action. Periodically, review the program to evaluate your progress. Participate!
VISUALS AND PRESENTATION NOTES

The visuals are available in PowerPoint slide show format on the Financial Integrity website. Visuals include detailed presentation notes for leading the seminar. We recommend that you use flip charts instead of projected slides in your presentation. There are many advantages: Using computer-generated slides requires technical knowledge. Anyone can use a marker on flip charts. Flip charts do not require a computer, electricity, or wires. Imagine having audio-visual difficulties or a computer failure during your presentation! Flip charts are interactive (slides are passive). You can draw on the flip charts to emphasize important points (such as, Enough!!). You can post the flip charts around the room for review and deeper discussions. We recommend that you do that!
Financial Integrity Seminar

Use these materials in conjunction with the FI Program Guide and the FI Instructor Guide. Use the slides to prepare visuals (flipcharts, overheads, slides) and use the notes as your guide in leading the seminar. This work is published under Creative Commons Attribution 3.0 License. Please see www.financialintegrity.org for rights restrictions.
Financial Integrity
Transforming Your Relationship with Money
With debt payments hanging over me, I was handcuffed to unfulfilling jobs. Using the FI program to get out of debt allowed me to take risks that I couldn't take before. I could work because I chose to, not because I had to. For 11 years now, I've been completely debt free.
Fred Ecks, San Francisco, CA
"The FI Program has been one of the most empowering experiences of my life. I started in college, and it helped me craft a life based on my values rather than financial anxiety.
Alan Seid, Maple Falls, WA
The FI program has given me incredible freedom. I spend my time doing the things that are most meaningful to me -- traveling, volunteering for important causes, learning new things, and being with the people I love. It's amazing to think that all this came about simply by examining my relationship with money.
Jane Dwinell, Montpelier, VT
Parking Lot
Ground Rules
Treat all personal information confidentially No shame, no blame Pay attention when you feel resistance. Take some time to ask yourself WHY you are reacting or rejecting Take care of your own physical comfort needs
Introduce Yourself
Your name Your location (city, town, neighborhood) The main reason you are here
A History of the FI Program

Joe Dominguez (1938-1997): Raised in Spanish Harlem, poor but brilliant Worked on Wall Street to study money Invested in stock market and lost it all Developed method that combined classic principals with daily behaviors in 9 steps 1969 Joe Retired at age 31 with savings from paychecks alone 1982-86 Transforming Your Relationship With Money seminars he never took personal income 1984 New Road Map Foundation created by Vicki Robin, Monica Wood and others to grant out income related to the money work 1986 Seminar recordings published as audio course Transforming Your Relationship With Money and Achieving Financial Independence 1992 Your Money or Your Life published by JD & VR 2008 Program re-created as Financial Integrity materials published under Creative Commons Copyright for free distribution
Joes Framework
Financial Intelligence
rational and responsible
meet your basic needs without paid employment
Financial Integrity
???
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What is integrity?
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What is integrity?
Soundness Sturdy, sure, security Ethical Appropriateness Truthful Stability With an incorruptible foundation
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Joes Framework
Financial Intelligence
rational and responsible
meet your basic needs without paid employment
Financial Integrity
awareness, wise decisions, alignment
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Why the Financial Integrity program?

Reduce stress about money Have more clarity about money Feel more in control Get out of debt Live within my means and save Be able to do the work I want to do Reconnect with my purpose in life
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(transition to 9 circles exercise)
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The 9 Circles Exercise
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The 9 Circles Exercise - Solution
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(transition to Money is )
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Money is
19
Money is
Security Scarce, hard to get, dont have enough Burden, responsibility, stress Dont deserve it Makes me happy Can get great things with it Freedom, joy A necessary evil
20
(transition to Fulfillment Curve )
21
Fulfillment Curve
22
Fulfillment Curve
23
Fulfillment Curve
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Fulfillment Curve
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Fulfillment Curve
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Fulfillment Curve
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Inventory Exercise
Visualize a public room. List 9 objects and categorize them as: Needs, Comforts, Luxuries, Clutter Report out to the group.
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Inventory Exercise Report Out

Needs Comforts Luxuries Clutter Enough
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Inventory Exercise Sample

Needs - table, chairs Comforts upholstered chairs, leather couch, photos, Luxuries big screen TV, art work Clutter (depends on audience!) **Some people will categorize similar items in different categories!
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Enough
It takes certain skills and qualities to reach enough, to recognize when youve reached enough, and to stay near that peak of the Fulfillment Curve, without falling back into deprivation or down into gluttony
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The Nine Step Process

Lifetime Income & Personal Balance Sheet
Managing Investments
Real Hourly Wage & Tracking
Capital & Crossover
Monthly Tabulation
Maximizing Income
Three Questions
Minimizing Spending
Wall Chart
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Break
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(transition to Step 1 )
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Step 1. How much money has come into your life? And what do you have to show for it? Lifetime Income & Personal Balance Sheet

35
Step 1. Lifetime Income

Financial Sources: Amount
Total Lifetime Earnings
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Step 1. Lifetime Income - sample

Financial Sources: Taxed income (SSA report) Untaxed jobs Selling stuff (cars, CDs) Allowance/"spending money" Gifts Interest on savings Total Lifetime Earnings $ Amount
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Step 1. Personal Balance Sheet

Own Liquid Assets (+) Cash Value Liabilities Owe (-) Cash Value
Hard Assets
Total Own
Total Owe
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Step 1. Personal Balance Sheet - sample

Own Liquid Assets Cash on hand Bank accounts (+) Cash Value Liabilities Car Loans School Loans Mortgage Hard Assets House Vehicles Total Own Total Owe Credit Cards Personal Loan Owe (-) Cash Value
39
Intangible Assets
40
Intangible Assets
Family, friends Relationships, social network Your body, youre alive, your health Your skills Education Travel experiences Compassion
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Step 1. Personal Balance Sheet - sample

Own Liquid Assets Cash on hand Bank accounts (+) Cash Value Liabilities Car Loans School Loans Mortgage Hard Assets House Vehicles Total Own Total Owe Credit Cards Personal Loan Owe (-) Cash Value
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(Step 1 Reflection )
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(transition to Step 2 )
44
Money is
Security Scarce, hard to get, dont have enough Burden, responsibility, stress Dont deserve it Makes me happy Can get great things with it Freedom, joy A necessary evil
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Money is a means of exchange
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Money is a means of exchange

What are you trading? You trade your precious time for money! Money = Life Energy
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Money = Life Energy

Just how much of your life energy
are you trading for money?
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Step 2. Being in the Present: Tracking Your Life Energy

Real Hourly Wage & Tracking

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Step 2. Real Hourly Wage

Real Hourly Wage
Dollars Base Annual Wage/Salary + Adjustments $ + Adjustments
Hours 2080 hours
= $ per hour =
- Adjustments
- Adjustments
Real Hourly Wage
____ hours
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Step 2. Real Hourly Wage - sample

Real Hourly Wage
Dollars Base Annual Wage/Salary + Adjustments insurance(s) benefits transit pass free meals $$$$ $$$ $$$ $ + Adjustments
Hours 2080 hours
= $ per hour =
- Adjustments clothing, uniforms tools, computers office niceties insurance premiums Real Hourly Wage $
- Adjustments $$$$ commuting time $$$ work lunches $$$ shopping time $$$$ xxx hours xxx hours xxx hours
____ hours
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Step 2. Is it worth it?

Every dollar you spend = the amount of your life energy it took to get it. Every time I spend about $_______ I am trading about an hour of my life energy. When I buy ______ , I am trading _____ hours of my life. The key question: Is it worth it?
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Step 2 Tracking
Tracking the flow of money into and out of your life Where does it come from? Where is it all going?
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Step 2 Tracking Methods
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Step 2 Tracking Methods

Keep a small notebook jot down everything Download transactions from online banking Quicken or other money manager software Check book Use debit card, and track cash on notebook.
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Step 2 Sample Tracking

12/10/07 12/10/07 12/11/07 12/12/07 12/12/07 12/12/07 12/12/07 12/12/07 12/14/07 12/14/07 12/14/07 12/16/07 12/16/07 12/17/07 12/18/07 12/18/07 12/18/07 12/18/07 12/19/07 12/19/07 12/19/07 12/20/07 12/20/07 12/20/07 12/24/07 12/24/07 12/24/07 12/24/07 12/26/07 12/26/07 12/27/07 12/30/07 12/30/07 12/31/07 12/31/07 ALBERTSONS TRADER JOE'S THE HOME DEPOT AMC Movies GUITAR CENTER ALBERTSONS QFC USPS COMCAST CABLE SHELL OIL ALBERTSONS RITE AID STORE CHEVRON ALBERTSONS BEST BUY ALBERTSONS QFC USA WATER POLO SHELL OIL ALBERTSONS THE UPS AMAZON BERT'S RED APPLE QFC OLD NAVY BEST BUY TARGET TERIYAKI KITCHEN ALBERTSONS RUBBER STAMP & BUTTON ALBERTSONS BEST BUY TARGET ALBERTSONS QFC -$88.40 -$42.29 -$57.16 -$31.95 -$19.58 -$11.00 -$21.46 -$6.55 -$47.44 -$44.02 -$48.35 -$66.90 -$63.06 -$60.66 -$49.05 -$47.54 -$28.95 -$65.00 -$31.17 -$34.63 -$21.09 -$18.97 -$14.51 -$22.17 -$7.50 -$105.71 -$31.56 -$30.00 -$55.80 -$11.20 -$15.73 $10.88 -$40.90 -$30.98 -$31.67
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Step 2 - Tracking vs. Budgeting

What practices (budgets, envelopes, spending restrictions) have you tried in the past to help manage your finances? What were your experiences and feelings with those? How is tracking different from budgeting?
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End of Session 1
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Welcome Back!
Financial Integrity
Session 2
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Step 3. Where is it all going?
Monthly Tabulation

61
Step 3 Add Your Categories

category cable cellphone drugstore entertainment gas gas gas gifts gifts gifts gifts gifts gifts gifts gifts gifts groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries office office office postal postal restaurant sports description COMCAST CABLE T-MOBILE RITE AID STORE HOLLYW OOD VIDEO SHELL OIL CHEVRON SHELL OIL NETW ORK FOR GOOD AMC Movies GUITAR CENTER BEST BUY AMAZON OLD NAVY BEST BUY TARGET BEST BUY ALBERTSONS SAFEW AY ALBERTSONS TRADER JOE'S ALBERTSONS QFC ALBERTSONS ALBERTSONS ALBERTSONS QFC ALBERTSONS BERT'S RED APPLE QFC ALBERTSONS ALBERTSONS ALBERTSONS QFC THE HOME DEPOT RUBBER STAMP & BUTTON TARGET USPS THE UPS TERIYAKI KITCHEN USA W ATER POLO amount -$47.44 -$136.79 -$66.90 -$17.31 -$44.02 -$63.06 -$31.17 -$31.42 -$31.95 -$19.58 -$49.05 -$18.97 -$7.50 -$105.71 -$31.56 $10.88 -$32.33 -$39.81 -$88.40 -$42.29 -$11.00 -$21.46 -$48.35 -$60.66 -$47.54 -$28.95 -$34.63 -$14.51 -$22.17 -$55.80 -$15.73 -$30.98 -$31.67 -$57.16 -$11.20 -$40.90 -$6.55 -$21.09 -$30.00 -$65.00
62
Step 3 Sum by Categories

category cable cellphone drugstore entertainment gas gas gas gifts gifts gifts gifts gifts gifts gifts gifts gifts groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries groceries office office office postal postal restaurant sports description COMCAST CABLE T-MOBILE RITE AID STORE HOLLYW OOD VIDEO SHELL OIL CHEVRON SHELL OIL NETW ORK FOR GOOD AMC Movies GUITAR CENTER BEST BUY AMAZON OLD NAVY BEST BUY TARGET BEST BUY ALBERTSONS SAFEW AY ALBERTSONS TRADER JOE'S ALBERTSONS QFC ALBERTSONS ALBERTSONS ALBERTSONS QFC ALBERTSONS BERT'S RED APPLE QFC ALBERTSONS ALBERTSONS ALBERTSONS QFC THE HOME DEPOT RUBBER STAMP & BUTTON TARGET USPS THE UPS TERIYAKI KITCHEN USA W ATER POLO amount -$47.44 -$136.79 -$66.90 -$17.31 -$44.02 -$63.06 -$31.17 -$31.42 -$31.95 -$19.58 -$49.05 -$18.97 -$7.50 -$105.71 -$31.56 $10.88 -$32.33 -$39.81 -$88.40 -$42.29 -$11.00 -$21.46 -$48.35 -$60.66 -$47.54 -$28.95 -$34.63 -$14.51 -$22.17 -$55.80 -$15.73 -$30.98 -$31.67 -$57.16 -$11.20 -$40.90 -$6.55 -$21.09 -$30.00 -$65.00
category cable cellphone drugstore entertainment gas gifts groceries office postal restaurant sports
amount -$47.44 -$136.79 -$66.90 -$17.31 -$138.25 -$284.86 -$626.28 -$109.26 -$48.73 -$30.00 -$65.00
63
Step 3 Final Tally

Inflows paycheck gifts interest sold car December Amount $3,100.00 $250.00 $37.00 $4,500 $7,887 Amount -$47.44 -$136.79 -$66.90 -$17.31 -$138.25 -$284.86 -$626.28 -$109.26 -$48.73 -$30.00 -$65.00 -$700.00 -$2,000.00 -$4,270.82
Outflows cable cellphone drugstore entertainment gas gifts groceries office postal restaurant sports car payment rent
64
Step 3 Check Totals

A c tu a l B e g in n i n g o f M o n t h C h e c k in g S a v in g C ash on hand Decem ber $ 2 ,0 0 0 .0 0 $ 5 ,0 0 0 .0 0 $ 1 0 0 .0 0 $ 7 ,1 0 0 .0 0 Decem ber Am ount $ 3 ,1 0 0 .0 0 $ 2 5 0 .0 0 $ 3 7 .0 0 $ 4 ,5 0 0 $ 7 ,8 8 7 Am ount - $ 4 7 .4 4 - $ 1 3 6 .7 9 - $ 6 6 .9 0 - $ 1 7 .3 1 - $ 1 3 8 .2 5 - $ 2 8 4 .8 6 - $ 6 2 6 .2 8 - $ 1 0 9 .2 6 - $ 4 8 .7 3 - $ 3 0 .0 0 - $ 6 5 .0 0 - $ 7 0 0 .0 0 - $ 2 ,0 0 0 .0 0 - $ 4 ,2 7 0 .8 2 $ 1 0 ,7 1 6 .1 8 In f lo w s paycheck g ifts in te r e s t s o ld c a r
O u t f lo w s c a b le c e llp h o n e d r u g s to r e e n te r ta in m e n t gas g ifts g r o c e r ie s o ffic e p o s ta l re s ta u ra n t s p o r ts car paym ent re n t
E n d o f M o n th s h o u ld b e :
A c tu a l E n d o f M o n th C h e c k in g S a v in g C ash on hand
$ 3 ,0 0 0 .0 0 $ 7 ,4 3 5 .0 0 $ 1 5 7 .0 0 $ 1 0 ,5 9 2 .0 0 $ 1 2 4 .1 8
U n a c c o u n te d fo r:
65
Step 3 Tracking Debt

What do you want to pay attention to? Separate principal and interest/fees/taxes/insurance
Car payments Mortgage Credit card payments
Paying off principal decreases your liabilities Interest and fees are the cost of borrowing money
66
Step 3 Categories Patterns

Why keep track of your totals each month?
Discover behaviors and patterns to gain awareness.
67
Step 3 Gazingus Pins

Those unnecessary things you buy automatically, because its a habit, or because they make you feel a certain way. You can create categories to track gazingus pins and to monitor when you make unconscious choices out of emotion or habit, and start building awareness for making conscious choices. . What do gazingus pins provide that you can get in other ways in your life? Comfort, connection, security, fun.
68
Step 3 Gazingus Pins Exercise

How do you decide something is a gazingus pin? Where would this item be on the fulfillment curve when I first buy it? Where would this item be in another month? Two months? A year? What are your gazingus pins?
69
Step 3 Add Life Energy

Inflows paycheck gifts interest sold car December Amount $3,100.00 $250.00 $37.00 $4,500 $7,887 Amount -$47.44 -$136.79 -$66.90 -$17.31 -$138.25 -$284.86 -$626.28 -$109.26 -$48.73 -$30.00 -$65.00 -$700.00 -$2,000.00 -$4,270.82 RHW = $10 Life Energy
70
Step 3 Life Energy sample

Inflows paycheck gifts interest sold car December Amount $3,100.00 $250.00 $37.00 $4,500 $7,887 Amount -$47.44 -$136.79 -$66.90 -$17.31 -$138.25 -$284.86 -$626.28 -$109.26 -$48.73 -$30.00 -$65.00 -$700.00 -$2,000.00 -$4,270.82 RHW = $10 Life Energy 310 25 4 450
5 14 7 2 14 28 63 11 5 3 7 70 200
71
72
Break
73
Step 4. Three Questions That Will Transform Your Life
Three Questions

74
Step 4 Three Questions

Q1 - Did I receive fulfillment in proportion to life energy spent? Q2 - Was this in alignment with my values, goals, purpose? Q3 - How would this change if I didnt have to work for an income?
75
Step 4 Add the Three Questions

Inflows paycheck gifts interest sold car December Amount $3,100.00 $250.00 $37.00 $4,500 $7,887 Amount -$47.44 -$136.79 -$66.90 -$17.31 -$138.25 -$284.86 -$626.28 -$109.26 -$48.73 -$30.00 -$65.00 -$700.00 -$2,000.00 -$4,270.82 RHW = $10 Life Energy 310 25 4 450 Q1 fulfillment Q2 alignment Q3
fin indep
5 14 7 2 14 28 63 11 5 3 7 70 200
76
Q1 Fulfillment in Proportion
77
Step 4 Rate Categories for Q1

fin indep
5 14 7 2 14 28 63 11 5 3 7 70 200
78
Q2 Alignment
79

fin indep
5 14 7 2 14 28 63 11 5 3 7 70 200
80
Q3 Financial Independence
81

fin indep
5 14 7 2 14 28 63 11 5 3 7 70 200
82
Step 4 Inventory Exercise

Review your items from the Inventory Exercise. (Needs, Comforts, Luxuries, Clutter) What value or goal (other than utility) motivated you to buy those items?
83
84
Step 5. Making Your Life Energy Visible
Wall Chart

85
Step 5 Wall Chart

8000 7000 6000 5000 4000 3000 2000 1000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
income expenses
86
Step 5 Creating a 4-line Wall Chart

70,000 60,000
50,000
40,000
Inflows Outflows Short-term Debt Short-term Savings
30,000
20,000
10,000
S ep te m be r
Fe br ua ry
N ov em be r
D ec em be r
87
N ov em be r
Ja nu ar y
O ct ob er
O ct ob er
A ug us t
M ar ch
M ay
Ju ne
A pr il
Ju ly
88
End of Session 2
89
Welcome Back!
Financial Integrity
Session 3
90
Step 6. Respecting Your Life Energy
Minimizing Spending

91
Step 6 Why do we spend money?

What ------------------ Why?
92
Step 6 Why do we spend money?

What ______________ Why? Eat out Pay rent Gadgets New car Cleaning service Hungry (necessity) Shelter (necessity) For fun (luxury, clutter?) Transportation (comfort?) Comfort, convenience?
93
Step 6 Conscious Actions

Conscious Elimination
Conscious Consuming
94
Step 6 Conscious Elimination

Eliminate consumer debt Develop maintenance skills Eliminate unnecessary medical costs Eliminate costly entertainment. Rent or borrow whenever possible. Eliminate gazingus pins. Find other ways of meeting the need
95
Step 6 Conscious Consuming

Wait for second generation/buy refurbished Look for quality Evaluate the value of add-ons Shop thrift stores (value for less money)
96
Step 6 Alternatives to Spending Money
97
Step 6 Alternatives to Spending Money

Get books, cds, dvds from the library Borrow tools from a neighbor Garden with friends Have pot-lucks instead of eating out Skip the convenience foods, and make your own snacks Ride a bike or walk instead of driving a car Join a babysitting co-op
98
99
Step 7. Respecting Your Life Energy
Maximizing Income

100
Step 7 Maximizing Your Income

* Move toward the highest possible income * commensurate with your integrity and health * for a finite period of time
101
Step 7 Conserving Life Energy
102
Step 7 Why Work?
Why do people work?
Or
What is the purpose of paid employment?
103
Step 7 Why do people work?

Status Contribute to society To pay the bills Get out of the house Tradition Health benefits, insurance Stimulation Be in contact with people Meaning in my life
104
Step 7 Income vs. Work

When we break the connection between income and work, we can look at our job and ask: Is this really what I want to be doing with my life energy?
105

Move toward the highest possible income
106

commensurate
with your integrity and health
107

commensurate
with your integrity and health
What are ways to increase your income, commensurate with your integrity and health?
108
Step 7 Ways to Increase your Income

What are ways to increase your income, commensurate with your integrity and health? Research going rate Ask for raise or promotion (research prevailing wage for your area first) Take a second job Move to job that maximizes your sense of engagement as well as your income, rather than staying put merely for the sake of security Live within your means
109

Move toward the highest possible income commensurate with your integrity and health for a finite period of time
110
111
Step 8. Capital and the Crossover Point
Capital & Crossover

112
Step 8 Living Within Your Means

8000 7000 6000 5000 4000 3000 2000 1000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan income expenses
113
Step 8 Compound Interest

The power of saving with compound interest
M o n e y
W Chart all
30000 27500 25000 22500 20000 17500 15000 12500 10000 7500 5000 2500 0
year year year year year year year year year year year year year year year year 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Investm with Com ent pound Interest (pink)
M onths
114
Step 8 Independence Income

My Wall Chart
6,000 5,000 4,000 3,000 2,000 1,000 Y1 Y1 Y3 Y3 Y1 Y2 Y3 Y2 Y4 Y4 Y5 Y5 Y6 Y6 Y6 Y7 Y7
Inflows Outflows Investment Income
115
Step 8 What is Inflation?

Defined by society: The statistical inflation rate is based upon the purchases of the average wage-earner. But, how average are you? Defined by you:
116
117
Step 9. Securing Your Financial Independence

Managing Investments

118
Step 9 Financial Independence
Knowledgeable Adept Sophisticated about appropriate investment vehicles
119
Step 9 The 3 Pillars
The 3 Pillars of Financial Independence Cushion Capital Cache
120
Step 9 Disintermediation Taking responsibility for:

Knowing how to invest in alignment with your goals and values Implementing and managing those investments
Dis-inter-mediation
No middle man Going directly to the source
121
Step 9 Investment Criteria

What investment criteria would you suggest?
122
Step 9 Investment Criteria

Safety Guaranteed stable Income Liquidity Minimized costs (money) Minimized costs (time) Long-Term
123
How the Financial Integrity Program Works

All steps are interdependent. The process is reflective and action based. Each step is important to the whole. You will see results even if you dont do every step.
124
(transition to Participation )
125
Independence vs. Inter-dependence
126
What are YOUR next steps?
127
Financial Integrity: Tips for Success

Create a place for your materials. Customize the steps as you need to. Be patient - change can be hard. Keep a journal - record your changes over time. Check out resources. Find support and friendship
128
Thank you for participating!
129

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Financial Integrity Transforming Your Relationship with Money

The Financial Integrity Program Guide

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 2

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 3

Ask Yourself These Questions

Do you come home from your job feeling fulfilled?

Do you have time to participate in things you believe are worthwhile?

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 4

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 5

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 6

What Is Financial Integrity?

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 7

Financial Integrity Will Help You

Which of these are relevant to you?

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 8

The Financial Integrity Program

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 9

The Nine Steps A Quick Overview

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 10

The Financial Integrity Program Guide Structure

Review & Reflection

Tips for Success

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 11

Tips for Success

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 12

Transforming Your Relationship With Money

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 13

The Nine Circles Exercise

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 14

Thinking Outside the Box

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 15

The Fulfillment Curve

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 16

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 17

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 18

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 19

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 20

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 21

The Power of Enough

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 22

Your Relationship with Money

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 23

Review and Reflection

Tips for Success

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 24

The Nine Circles Exercise Solution

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 25

Step 1: Lifetime Income & Personal Balance Sheet

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 26

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 27

Step 1 Preview Part A. Estimate Your Lifetime Income

Part B. Create a Personal Balance Sheet

House Vehicles Personal items

Personal Financial Net Worth: Assets Liabilities = $_______

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 28

Step 1 How It Works Part A: Determine Your Lifetime Income

Lifetime Income Worksheet

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 29

Jamies Lifetime Income

Chris Lifetime Income

THE FINANCIAL INTEGRITY PROGRAM GUIDE | PAGE 30

Part B. Create a Personal Balance Sheet