How Much Money Did You Actually Keep This Week?

The alarm clock goes off at 6:30 a.m.

You groggily brush your teeth and hop in the shower.

The hot water feels nice. Should I skip work today?

Then, reality sets in. What time is my first meeting today?

Shower done. Now, what to wear? The blue shirt? Again?

Let’s go, let’s go! Pick up the pace! The kids need to get dressed and eat breakfast.

Why are we always so rushed before school? Tomorrow, I’ll wake up earlier.

The train will be here in 10 minutes. “Bye kids! Bye Honey!”

I gotta get across the tracks! Speed walk!

Phew. Made it.

30 minutes to catch your breath before work starts.

What day is it today? Tuesday?? It’s only Tuesday?!?!

I’m tired.

Do you ever notice the people on the train?

Does this routine sound familiar to anyone?

At least you’ll have something to show for it come pay day.

Wait, you go through all that effort every day and you’re not saving a good portion of your paycheck?

Let’s talk about that.

When I take the train downtown, I can’t help but notice my fellow passengers.

Some people are already cranking away on their laptops. Some are even on conference calls, which always surprises me.

Why don’t they care that everyone is annoyed with them? Do the other people on the call know that they’re talking to someone on a train?

But, I digress.

Some passengers are reading books. A good portion of passengers are doomscrolling. Just about everyone has headphones in.

It’s not that people look unhappy. They just seem to want to be somewhere else.

Do you have similar observations?

Most people don’t have a plan.

It’s at times like these when I start to wonder how many of these people have a plan.

I’m not talking about a plan for lunch or for getting to the gym after work.

I mean a plan for how to spend their time and their money.

Ideally, this plan would be based upon spending time on meaningful pursuits with meaningful people.

My guess is most people have never really thought about this kind of plan.

Instead, it’s go to work. Get a paycheck. Pay the bills.

Same thing tomorrow. That’s as far as the plan goes.

This routine may be enough for some, or even most, people. If that’s enough for you, there’s no shame in it. Holding down a steady job and providing for your family are accomplishments to be proud of you.

But, let’s be real.

You’re reading a personal finance blog.

We spend a lot of time talking about financial freedom and creating options.

You wouldn’t still be reading if you didn’t feel there was more to life than the daily train ride, right?

You may not know how or when to get off the train, but you’re interested in finding out if it’s possible.

Well, it’s definitely possible. But, you need to break the cycle and commit to a plan.

Here’s a question to help you get started.

How many hours do you work to make money?

Let’s say you work 2,000 hours per year to make money (40 hours per week, 50 weeks per year). 

We won’t even count all the hours you spend getting dressed and riding the train.

Also, we will pretend you’re not looking at your emails in the evening, on weekends, and on family vacations. 

We definitely won’t count the hours you’re staring at the ceiling fan worried about tomorrow’s challenges at work.

OK, so you’re working 2,000 hours (plus) per year to make money.

My question is:

How many hours per year do you think about what to do with that money?

Let that sink in for a moment.

You work a lot of hours. I’m guessing many of those hours are stressful.

Yes, you get paid money in exchange for those hours.

But, do you still have any of that money?

Do you care more about making money or keeping money?

Think back on how much time, energy, and sacrifice you dedicated to making that money.

Hopefully, you saved and invested a good portion of that money.

The problem is that most lawyers and professionals work incredibly hard, make good money, and don’t keep enough of it.

They somehow find 2,000 or 3,000 hours per year to work.

But, they won’t set aside even a few hours per month to think about what to do with all that money.

This is why I am passionate about money wellness.

Most people spend the vast majority of their lives worried about making money and practically no time at all thinking about what to do with that money.

No, I’m not suggesting that you need to think about money for 2,000 hours per year.

What I am suggesting is that even a little bit of time each week spent thinking and talking about money is just as important as the time you spent earning it.

That’s how you break the cycle of mindlessly riding the train to work and start progressing towards financial freedom.

It’s not how much money you make. What matters is how much you keep.

Robert Kiyosaki put it best in Rich Dad Poor Dad, “It’s not how much money you make. It’s how much money you keep.”

If you knew someone who made $1,000,000 per year, and at the end of the year, had only saved $20,000, what would your reaction be?

Sadly, this is how most people behave with their money.

They inherently know that they should be saving more, but they come up with excuses. They assure themselves that they’ll start saving more next year.

On the other hand, what if you knew someone who made $100,000 per year and saved $40,000?

Did your reaction change?

This is the kind of person who will actually achieve financial freedom and have choices in life.

It all comes down to how much you keep, not how much you make.

It’s why your personal saving rate is so important.

Don’t forget, your saving rate is the one thing you can truly control.

What is a saving rate?

Your saving rate is simply the amount of money you save each month divided by the amount of money you make.

Saving rate = Money Saved / Money Earned

Just like staying on budget with two simple numbers, you can monitor your progress with this simple formula.

I find it helpful to measure your saving rate based on your monthly income and savings. This way it matches up with your Budget After Thinking. 

Tracking your saving rate will help you understand if you are making progress over time. 

It’s not about comparing yourself to someone else. Whatever your current saving rate is, the goal is to seek personal improvement. 

Just like with tracking your net worth, the purpose is to see if you are making personal progress over time.

How can you make progress with your saving rate over time?

When it comes down to it, there are really only two ways to improve your saving rate.

1. You can spend less, and save more, of the money you’re currently making.
2. You can make more money and save most of that money, all while keeping your expenses the same.

Combining those two ideas is even better: make more money, spend about the same. 

Use the excess money you make to fuel your Later Money goals.

If you can do that, your saving rate and your net worth will steadily climb.

You’ll realize that you’re closer to getting off the train than you think.

How much money did you keep this week?

When you get your next paycheck, pay attention to how much of that money you actually keep.

Once you pay the mortgage/rent, car payment, and credit card bills, is there anything left for you?

If your saving rate is low, this exercise should make you mad.

Seeing 95% of your hard-earned money disappear as soon as it comes in should inspire you to make some adjustments.

Those adjustments may be small at first. Over time, you’ll experience that it feels better to keep money than to spend money.

Keeping money leads to options.

Spending money leads back to the train.

Have you ever observed your fellow commuters in the morning? What are your takeaways?

Do you have a plan to get off the train, should that be your choice?

Let us know in the comments below.