The Truth About Life Energy: Are You Really Living, or Just Working to Live?

?? Can you believe it’s already December? The year has flown by, especially for those of us in the middle of our careers or running businesses. As the year wraps up, it’s easy to feel like we’re just working to get by, rather than truly living.

But this year’s end is the perfect time to pause and reflect. How are we spending our "Life Energy"—our most precious resource? Are we using it to create a life we love, or are we just working to keep up? Let’s make sure that in the hustle of it all, we don’t lose sight of the bigger picture.

I’ve been thinking a lot about this concept lately as I work on my book and reflect on my own life choices. Recently, I bought a car, which got me thinking about the true cost of things—not just money, but the time and energy we trade to afford them.

What is Life Energy?

The idea of "Life Energy" comes from the book Your Money or Your Life by Vicki Robin and Joe Dominguez. They argue that our time, energy, and life itself are our most precious resources—way more valuable than just money. When we earn income, we’re not just “making money”—we’re trading our Life Energy for it.

For example, think about your paycheck. It feels good when it hits your bank account, but when you factor in taxes, commuting, meals, and stress relief, and the like, you might realize that your paycheck isn’t as much as you thought. And you’re giving up your Life Energy to earn it.

They also created a calculator to help you visualize your own situation: https://yourmoneyoryourlife.com/life-energy-calculator/

How Much is Your Life Energy Really Worth?

I used to think that making a six-figure salary meant I was rolling in the cash. But when I crunched the numbers, I realized that my actual hourly rate was much lower than I thought.

Take the job I retired from for example, with a salary of $160,000 a year, working 38 hours a week, and factoring in taxes (federal and state) and all the hidden costs, my real hourly rate ended up being 40% of what I thought it was—around $32 an hour. Yikes! So, in reality, I was spending 1.5 times more Life Energy than I realized for everything I bought. ??

What Does This Have to Do With Buying a Car?

This brings me to my recent car purchase. I had planned to buy a ten-year old car for under $20,000, but my husband convinced me to buy a newer model. So, we compromised and bought a 2022 CRV for $27,000. Crazy how inflation made everything so expensive! Sounds like I didn't save much, right? But when you look at it through the lens of Life Energy, the cost becomes a bit more clear.

Here’s the breakdown:

New Car: $35,000; Life Energy: 5.3 months

Used Car: $27,000; Life Energy: 4.1 months

So, the extra $8,000 for the new car translates to an extra month of work. Plus, there are higher insurance and registration costs, meaning we’ll be spending even more Life Energy.

Here’s the reflection: Even though that extra month of work seems manageable, why waste it away if you don’t have to? For me, a used car brings the same comfort and joy as a new one!

The Real Cost of Living: High Taxes, High Life Energy

And here’s another thing to think about: where you live also affects how much Life Energy you spend. For example, in states like California or New York, your salary may be high, but after taxes and the high cost of living, you might end up spending way more life energy just to make ends meet.

Using the same set of assumptions as before, a similar house in California might consume 21 years of Life Energy (instead of 7.6 years if you were in Arizona)!

You might argue, “But you make more in California.” True, but even if your salary triples, you’d still be spending at least a decade just to pay off your house.

On the flip side, living in a low-tax state like Washington can help you stretch your Life Energy further, giving you more financial freedom to live the life you want—if your salary is high enough.

What’s the Point?

The point is, Life Energy goes beyond your paycheck. It’s about how you spend your time, energy, and resources to create the life you want. It’s about making choices that help you enjoy what matters most, without feeling like you’re constantly working just to keep up.

So, before you make your next big purchase or decision, ask yourself: How much Life Energy am I really spending on this? Will it improve my life, or am I just trying to keep up with the Joneses?

And here’s a fun question for you: What’s something you’ve bought that you’ve realized took more of your Life Energy than you expected? I’d love to hear your thoughts! ??

#LifeEnergy #FinancialFreedom #SmartSpending #WealthBuilding #WorkSmartLiveSmart