Steadfast FinancesVisualizing How the Things You Own, End Up Owning You.

Visualizing How the Things You Own, End Up Owning You

Filed in 20s Something Advice , Infographics & Chartology , Saving Money , Strategic Planning 64 comments

Due to the popularity of the visualizing how your stuff owns you post from several weeks ago, I thought it would be beneficial if I documented exactly how I use a simple monthly calendar and a few personal finance metrics to visually represent how many hours, days, even weeks, I had to work in order to maintain “ownership” of my stuff when I first entered the workforce.

Just to show that all personal finance bloggers aren’t a pristine model of financial responsibility all of their lives, the graphic below represents how my personal finances looked using what I call the “How your stuff owns you calendar?” method when I was fresh out of grad school, making ~$60,000 a year, and leveraged up to my eyeballs.

The Slave to My Stuff Years

As you can see, like many green 20s Something young professionals, I quickly leveraged myself (e.g. handed over my future income) so severely that I was barely cash flow positive by the end of the month. Not to mention, having just bought a home, closing costs and the hidden costs of home ownership depleted most of my savings fairly quickly, so I was forced to become a serious frugal living expert after figuring out — too late of course — that I had officially become “mortgage poor“.

The observations I make from my personal finances calendar are:

  1. I bought way too much house on a single income.
  2. I was 2 paychecks away from defaulting on a loan (if I couldn’t borrow money from family).
  3. I wasn’t living beyond my means, but I was very close!

So I hope this in-your-face method of visualizing this how your stuff ends up owning you exercise will help you think twice before over-leveraging yourself… as I did!

How to Calculate your “Stuff per Hours Worked” Metric

Generating this graphic is very simple and takes just a few minutes. All you need to know is your annual salary and how much you pay every month on each individual bill.

  1. Calculate your daily post tax bring home pay. Take a look at your pay stub or direct deposit receipts, and convert this number to your annual, post tax bring home salary. Then, divide this number by the number of days you work each year. For example, assuming you work a standard 9 to 5, five day a week job, let’s say your biweekly direct deposit total is $1500 post taxes, retirement contributions, etc. Simply multiply $1500 by 26 paychecks, then divide this number by 260 work days. In this example, the total will equal $150 per day.
  2. How many days you work to pay each individual bill and liability. Let’s assume your mortgage (or rent) is $1500 per month. If you bring home $150 per day, you will need to work 10 days at this pay rate to stay in your home. So take your calendar, and draw a line through the first 10 business days, and label them as “mortgage payment”, “rent” or as I did, “my townhouse owns me”.
  3. Repeat Step #2 for every bill or liability you currently have. If you have a car, add how much you pay each month for your auto loan, your monthly auto insurance payment and any personal property taxes you might have. Do this for your student loans, credit card debt, and any other long term contractual agreements. Of course, don’t forget that having a home means you have an electric bill, water bill, in-home entertainment and telecom costs just to keep the place habitable. And finally, you still have to pay fuel costs to and from work, keeping yourself clothed and presentable just so you can keep your job. Feels like I’m forgetting something. Oh yeah… you still have to eat!

If you have any other financial obligations that I didn’t include — a family perhaps — make sure to add them into your calculations.

Digging Out of Debt by Improving Cash Flow

If you have spread your personal finances out as thinly as I did, it’s probably time to take action.

In my case, I only had 3 worthwhile options:

  1. Increase the amount of money coming in (e.g. your cash flow).
  2. Decrease the amount of money going out.
  3. Start selling assets to reduce my liabilities.
  4. Win the lottery (I do not recommend relying on option #4).

Notice how I did not recommend cutting out business insurance or general liability insurance from you bills, as insurance is the easiest way to protect what you already have.

At the time, I didn’t want to sell my home since I had just bought it and I couldn’t sell my car since I didn’t have a mass transit option available, so I had to play the cards I dealt myself.

Owning a larger than average home meant I had income generating potential. So I rented out the finished basement for $500 per month, as well as got my new roommate to pay half of all utilities and in home entertainment costs. With this one step, my positive cash flow increased 3 to 4 fold.

Being your average American male, I wasn’t a very good cook. I relied mostly on cheap take out food or medium scale restaurants for at least one third of my dinners. Once I learned to cook, and by cook I mean learning how to cook well (actually I cheated and dated a chef for 6 months), I was able to cut my food budget nearly in half by making restaurant like meals at half the price.

Wanting to have a killer bachelor pad, I got the most tricked out cable TV package I could get. Digital cable, HBO, Showtime, the digital music channels — the works! Problem was, this stuff was around $100 per month and I rarely watched it. Even though the introduction of a new roommate meant cutting the cable bill in half, we switched to basic cable and never missed it a second since I spent most of my time cruising the bars downtown or shooting hoops on the outdoor courts.

And the cost cutting projects continued. Six months later, I had paid off all of my consumer debt as well as built an emergency fund around $5,000.

Looking back, I consider over-leveraging myself one of the greatest mistakes I made as a young adult. Even though I walked away unscathed with a killer credit score, I had to hustle and use a few clever money hacks just to get by.

Obviously, I would also not recommend pushing the envelope to this degree. Not only did I miss out on a few life experiences I wish I had gotten to attend since I didn’t have the disposable income (e.g. saver’s remorse), the amount of anxiety caused by money related concerns gave more sleepless nights than I care to remember.

So if you landed on this page and decide to use this technique, you will, hopefully, learn from my mistakes regardless of your age since this applies to the young professional as well as the 40 year old first time home buyer. Plus, this occurred in the early 2000s when the economy was fairly strong and I had job offers out the wazoo, so it’s not like I couldn’t find a job the next day with the large number of headhunters I had in my email contact list.

But the key point to take away is that the more you leverage yourself, the more you’re exposing yourself to potential dangers. One unanticipated layoff and not having an emergency fund in place, and you could find yourself in serious trouble.

If you have questions, or you used this technique and it helped you reduce your expenditures or convinced you not to lever up more so than normal, feel free to leave your questions/comments below.

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Posted by CJ   @   12 January 2010 64 comments
Tags : , , , , , ,


Jan 12, 2010
10:00 pm
#1 Ariel :

Great post, like the visual. I have a similar story in terms of landing in a ton of debt at a rather young age. Good intentions that went awry. Not enough financial education to realize that I my home was not an asset and that we shouldn’t have built for capital gains and instead have invested our energies towards finding cash flow opportunities. Lessons learned the hard way.
.-= Ariel´s last blog ..Truly Free eBooks for Wealth, Inspiration and Education =-.

Jan 13, 2010
12:50 am
#2 Tracy :

I just worked out the calendar for the first time. Interesting exercise…as I’ve mentioned before, my income is good, my habits sucked. Now that I am turning that around it seems so much easier to handle finances rationally from the beginning. Sadly, I still know a lot of people who suffer the same types of habit issues that I had and they aren’t really recognizing it even in the face of this economy. It’s kind of eerie. One friend clucked at me sympathetically earlier this evening about how hard it is for someone to live on my monthly earnings. I didn’t know what to say except, ummm, no it isn’t.

Jan 13, 2010
10:23 am
#3 Matt SF :

Thanks Ariel. I’m probably in the minority by thinking my home is an asset, but only because I can sell it in a pinch or squeeze income out of it if necessary. (Maybe this is too strict under accounting rules, but I like to do it.)

My thing, being young and gullible, was listening to experts ramble on about “good debt” vs. “bad debt”. I thought since the mortgage was good debt and the student loan was good debt, that I would somehow be okay by over-leveraging myself — wrong!

Six months into the mortgage, my logic reminded of that old quote where: the road to hell is paved with good intentions. I’m sure the road to foreclosure or bankruptcy has a similar paved roadway, but fortunately, I had a few ways to improve the cash flow situation.

Thanks for commenting! Hope to see you around more often.

Jan 13, 2010
10:38 am
#4 Matt SF :

One friend clucked at me sympathetically earlier this evening about how hard it is for someone to live on my monthly earnings. I didn’t know what to say except, ummm, no it isn’t.

That’s priceless! Some people simply have no clue how to reduce their expenditures without lowering their standard of living.

It’s those people that might be the greatest dangers to themselves since they have evolved into a dependent consumer rather than an educated consumer. I suppose one could argue these types aren’t all that different from a baby who’s totally dependent upon mama to get fed.

Glad you got some value out of the calendar exercise. I think the average household should strive for at least one whole week that belongs to them, but a minimum of two whole weeks might be a better goal to strive for. Unobtainable maybe, but it’s a good to put yourself or your family before your stuff.

Jan 13, 2010
1:59 pm
#5 Matt Jabs :

This is an excellent exercise for ANYONE to do Matt… great creative product you have here. It reminds me of the “How much my debt costs spreadsheet” I created to figure similar calculations.

I have not completed this exercise for my own self yet… hopefully I can find the time to do it soon, although I think I already have a pretty good handle on my situation.

For those who do not… DO THIS! It will help clarify to you the real truth about debt, borrowing, and earning.
.-= Matt Jabs´s last blog ..When Does Compound Interest Kick-in? =-.

Jan 13, 2010
2:22 pm
#6 Matt SF :

Thanks Matt Jabs! That’s big props coming from you!!!

Jan 13, 2010
2:30 pm
#7 Money Funk :

Great post. I will need to read up on the latter post.

I enjoyed reading how improved your cash flow (especially by dating a chef). We might need to do things we didn’t plan on doing to secure out financial foundation, but just realize (like taking on a roomate) does not need to be a forever thing. Just until you get to where you need.

Again, nice post. :)
.-= Money Funk´s last blog ..iPhone vs Blackberry: did I get the wrong phone? =-.

Jan 13, 2010
3:04 pm
#8 Mrs. Micah :

Yep. Living in DC can be expensive, but if you live quietly and don’t overextend, then you can pull it off pretty well even if you’re not a high earner.
.-= Mrs. Micah´s last blog ..Why I Don’t Want to Retire Early =-.

Jan 13, 2010
3:04 pm
#9 Matt SF :

Thanks! Having a roommate was definitely a short term thing, and I didn’t want to get share the house in the beginning.

But having a cash flow crunch as well as having the unused basement that hadn’t materialized into the “man cave” yet, I found myself in the unfortunate position where I had to compromise.

In the end, it was actually a pretty cool experience b/c I screened about a dozen different folks and guy I selected was guy was pretty cool (and never home)!

Jan 13, 2010
3:16 pm
#10 Matt SF :

Actually, it wasn’t finance related if that’s what you were thinking. haha!

I entered the biotech/pharma market at precisely the best time (Human Genome Project time frame). Plus, I had worked for a few big name companies/organizations and worked for (and brown nosed) a lot of influential professors, so I got a more generous salary than most of my peers.

For reasons you mentioned, I actually turned down the PhD program. The bang for the buck wasn’t really there, although, had I stayed in the biotech field I would have ran into a pretty big glass ceiling since PhDs are usually the decision makers (outside of the MBA types who run the companies).

Jan 13, 2010
8:06 pm

Great visual Matt, really makes it painfully clear where your money’s going! Good job scaling back on your expenses and getting things under control. You’re a role model to us all.

BTW, if you’re interested I’m hitting you up for 8 random things about yourself. I think you’ve already given us 4 or 5 in this post.
.-= David @ MBA briefs´s last blog ..Eight Random Things About Me =-.

Jan 14, 2010
8:19 am
#12 Matt SF :

Thanks David. I certainly wasn’t a role model back in 2001, but it’s gotten better after a big kick in the pants.

And I’ll drop you an email with 8 random things about me later today.

Jan 14, 2010
5:42 pm

Thanks for the tips for visualizing expenses. I going to use your metric and see where I am sitting, and look to see where I can reduce or eliminate expenses. Just a quick tip, makes for a good partial replacement to DVR/TiVo.
.-= Jason Bartholme´s last blog ..ShortTask Uses Crowdsourcing to Connect Seekers and Solvers =-.

Jan 14, 2010
9:27 pm
#14 Matt SF :

You’re welcome Jason. Let me know how it turns out.

Hulu should work as a cost cutting tool for now, but it’s supposed to move to a fee based business model in the near future. Not sure how the pricing is going to work at this time.

Jan 14, 2010
9:29 pm
#15 Matt SF :

That’s why the calculation includes post tax salaries. Most everyone is different scale when it comes to the T word.

Jan 15, 2010
8:30 am
#16 Anon A. Mus :

You should try this as pre-tax. It is scary to see how much of your money isn’t yours…

Jan 15, 2010
8:33 am
#17 Matt SF :


Yeah I did that in the beginning. Only problem was I wanted it to a universal calculation since some people will pay more in federal & state taxes, allocate more towards their 401k fund, etc. I would say you can lose 25% to 40% pretty quickly depending on your ratios.

Jan 15, 2010
8:45 am
#18 David :

Everyone is different on everything. That’s no excuse to leave out taxes. And why call it the “T word” like it’s not a normal part of everyone’s budget. Just because the government confiscates it before it hits your bank account doesn’t mean you haven’t earned it and paid it out.

Jan 15, 2010
8:55 am
#19 Matt SF :

@ David

I didn’t include taxes because you don’t have a choice to pay taxes, but you do have the choice of over-leveraging yourself – as I did.

And T word phrase was just sarcasm.

Jan 15, 2010
9:26 am
#20 Matt SF :

That’s a good point, and maybe I should try to get a tax expert to take a look at creating a graphic based on their experiences and expertise. Perhaps ask him or her to devise a graphic how one could minimize taxes by boosting 401k plans, IRAs, tax advantaged funds, using state/county municipal bonds versus regular bond funds, etc.

Jan 15, 2010
2:02 pm
#21 Amanda :

I like your blog. However you forgot to pay tax. If you make a yearly calendar the first 4-5 months you would be paying taxes. See tax freedom day at I know it is different for everyone but people can figure out how much tax they pay and add that to the calander. :) That really gives a full picture.

Jan 15, 2010
3:29 pm
#22 Matt SF :

Thanks Amanda, scary realization indeed!

Jan 15, 2010
9:23 pm
#23 Waldo Pepper :

Ummm. Why take your take-home net, multiply it up to get the yearly, then divide by 260? Why not just divide by the number of days that pay stub covers? You are getting an average either way. You would still have arrived at that $150/day figure.

Jan 17, 2010
10:28 am
#24 Matt SF :

That also works. Multiple ways to get to the same solution.

Jan 18, 2010
12:00 am
#25 hobbes :

Great post on visualizing where your money goes; just something that seeing it on that calendar that gives it that impact. Just a quick note on the math, given you’re working with 260 days/year, if you’re using expenses per month (like $1500 rent/month in the example), then actually (and unfortunately) your “monthly” calendar only has about 22 days, rather than the 25 days visualized. So, I may have taken your remaining days to yourself away … sorry!

Jan 18, 2010
12:41 am

Hey Matt – How come I never saw this post? Sweet! Will include in my Katana wrap.

Jan 18, 2010
12:46 am

Gotta say Matt, leveraging myself has been one of the greatest BOONS for me. Why? B/c having leveraged scared me shitless to work my butt off and be the best worker I could be, get my MBA part-time for backup, and learn as much about making money in various forms as possible.
.-= Financial Samurai´s last blog ..The Katana: Help Haiti If You Can 1/17 =-.

Jan 18, 2010
9:14 am
#28 Matt SF :

You’re exactly right FS b/c I was scared to death when I did this exercise in Fall of 2001. Whether you call it survival instinct, or just the right amount of motivation to either “crap or get off the pot”, this chart really told me I needed to hustle more.

So smartening up was item number 1. Monetizing the empty basement and getting a roommate was #2. Finding a good headhunter was #3! haha! I moved a year later w/ a 20% raise!!!

Jan 18, 2010
9:18 am
#29 Matt SF :

Well if this Dec 09 calendar is 23 days, the shorter months will lower the number of business days per month. It’s not meant to be super precise, just a reasonable representation. Had I created it in Feb 2010, the results could have looked different.

Jan 22, 2010
3:05 pm
#30 Candydiva04 :

Does anyone else looking at this realize that in the month of december the author of this blog is really only working 1 day for himself since he seems to be counting, nov 30 and january 1st in the month of december?

Jan 22, 2010
3:33 pm
#31 Matt SF :

Good point, that’s even more depressing!

Jan 26, 2010
10:43 am
#32 Kandace :

There’s a bit of a flaw with the calendar as weekends are not counted. Sure, you count the days you work, but by counting the weekends doesn’t that leave more days to spread the “for me” category? All costs should be spread out over the entire month, not just the days that income are earned as the money used is also spent to cover those days.

Jan 26, 2010
11:01 am
#33 Matt SF :

I disagree because I wasn’t earning income on the weekends. The intent of the calendar is to show how much are you working to buy, retain ownership or maintain the quality of your stuff, not to fully distribute the costs over everyday of year.

The “3 Days for Me” category is intended to show that out of the entire month, only 3 days of earned income is used to “pay myself”, but as one astute commenter mentioned above, I’m really only working 1 day for myself since I included Nov 30 and Jan 1.

Jan 26, 2010
11:05 am

Your blog doesn’t generate income during the weekend?
.-= Investor Junkie´s last blog ..How I Learned Everything About Business By Owning A Lemonade Stand =-.

Jan 26, 2010
11:27 am
#35 Matt SF :

That comment reply was to clarify my 2001 income that I used in the debt calendar example. But to answer your question, no, this blog doesn’t generate income at all as I haven’t monetized it. Just doing it for the fun of blogging, although maybe one day I’ll get around to it.

Jan 27, 2010
1:01 am
#36 mbhunter :

Love the calendar illustration. Nice post!

Jan 27, 2010
11:23 am
#37 Matt SF :

Thanks MBH!

Mar 16, 2010
5:37 am
#38 Carlo :

Great post! As always, visualizing the data dramatically improves our understanding about the issues.


Jun 9, 2010
9:35 am
#39 Jeff :

Great post! The only thing I take issue with is the food category. After all, you do have to eat, so it’s not really a thing that owns you. What I’d like to see now is your new schedule.

Mar 19, 2011
11:49 am
#40 Eddie :

Car loans are a special pet peeve for me – no other thing do we pay 15% over the asking price, for an item that’s worth 1/4 of that by the time we’ve finished paying for it.

In a period a couple years ago of needing to make some tough financial decisions for some short-term but unavoidable (family health) reasons, I found myself in the position of learning to live below my means. In my case, I decided not merely to become more frugal but to decide which parts of my standard of living I wanted to sacrifice and which parts I wanted to hold onto.

I made a chart similar to the above, and then made deep, DEEP cuts in my expenditures. When the short term issue went away (which happened much, much, much faster than I’d anticipated) – I simply couldn’t imagine going back to how things were. I had relearned how to live on what I made immediately post-college (something I did a really poor job of back then), in spite of now making five times as much. I ended up with *no* debt, and recurring monthly bills that are covered by my takehome on the first couple days of the month. The rest is recreational and a substantial percentage that goes into investment & savings. I have since made and remade this sort of chart over and over again, as I way of visualizing the impact of various financial decisions. Seeing days lost of savings & investment potential, or even watching that new car loan encroach on your vacation plans can help you make the right decision.

Mar 19, 2011
12:03 pm
#41 Matt SF :

I hear ya Eddie. Cars, and especially SUVs, are widely considered the worst investment Americans make. Granted, you get from A to B so you get the value of transportation, but if you’re financing them, you’re paying interest on a depreciating asset. Not a very wise move in my opinion.

Apr 14, 2011
4:25 pm
#42 Mike T :

So I like your post so much I had to comment. 6 years ago I graduated college, 5 years ago I bought a townhouse. One paycheck covered the mortgage, the rest went to bills. I couldn’t save a hundred bucks a month. I also had 7k in student loans left and 5k in personal loans for my “toys”(motorcycles, cars, etc..)

It took me a year of owning that place and then I said “What if I lose my job?” Hell, I didn’t even want to live in the area in anymore. I was so pissed off at myself for what I had gotten into, the feeling was unbearable. The idea that I was going to work for the next THIRTY years for that crappy townhouse made me just want to give up. I was making good money, but had less than $500 in the bank.

I changed everything. 3 years ago I sold everything. Furniture, old sports equipment. I removed all the clutter from my life. Sold my car and motorcycle and picked up a cheaper vehicle. I stopped buying small every day items that add up. I sold my townhouse knowing that the $10,000 of materials put into would be lost, but I knew the feeling of being debt free would be worth it.

I now have 30k in the bank account and live in a cheaper small apartment with a friend. The feeling I have now after that situation is indescribable. Not only am I a much happier person with minimal possessions, I feel like I have much more freedom than what our corporate society has trained us to do.

Apr 14, 2011
4:32 pm
#43 Mike T :

I wasn’t clear in my post, but I have absolutely no debt. I never plan to go in debt again. I might have taken things a little over the top, but it was well worth it. I could never imagine being in that situation again. I’d gladly trade every dime in my savings account to NOT own all those possessions and have that debt.

Apr 14, 2011
5:10 pm
#44 Matt SF :

Good stuff Mike. I felt exactly the same way. The stress relief from having zero debt is almost indescribable.

One of the problems I frequently run into is the feeling of a debt free life is so unimaginable to some people that’s it’s difficult to explain or comprehend… until they do it.

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