As part of the Boost My Budget project I’m challenging myself to read one money-related book every month! See previous reviews here.
This month’s review is Your Money Or Your Life, by Vicki Robin and Joe Dominguez.
When I decided to take on my monthly book review challenge, this was the first name to go on my list. Your Money Or Your Life is a personal finance classic that is name checked on almost every money blog and forum out there, particularly those dedicated to early retirement and escaping the rat race.
The book sets out the money management program developed by co-author Joe Dominguez, which enabled him to retire early at age 31 (in 1969!). The authors claim to have helped hundreds of thousands of people reach financial independence with their nine step program.
Can they help me too?
To be honest, I doubted it. Your Money Or Your Life was first published in 1992. Not exactly cutting edge. What could this book have to offer a millennial, grappling with her cash flow nearly quarter of a century after the book’s publication?
Luckily, I soon found out that this book deals in general principles and concepts. It carefully shies away from specific advice which could become outdated.
Unlike the last book I read – which was only five years old but felt ancient – this is a much older book that feels timeless!
Your Money Or Your Life sets out nine practical steps that lay bare your own beliefs and behaviours surrounding money, and then teach you to fix it.
It promises that working through the steps will teach you the three FIs: Financial Intelligence (increased awareness about money), Financial Integrity (spending in line with your values), and finally Financial Independence (not having to work for money).
The nine steps demand commitment: they start with working out exactly how much money you have ever earned in your life, move through tracking every penny that comes into or out of your life as you go forward, and encourage you to do a lot of soul-searching about whether the things you spend money on are actually making you happy.
Essentially, the steps teach you to be aware of your priorities in life and whether your spending habits are aligned with these. Over time, through careful tracking and reassessment of your values each month, the book claims you will naturally start to spend less and save more.
The savings should be invested until you reach the ‘crossover point’ where they generate enough interest to cover your expenses.
At this point, you can retire!
The emphasis is firmly on ‘no shame, no blame’. The authors teach that you must accept and come to terms your past financial behaviour in order to completely change your ways.
There is also a strong emphasis on anti-consumerism and simple, frugal living. I think this aspect is one of the things that makes the book feel fresh and modern to me.
I love the many passages on the environment, where the authors highlight the links between consumption and the destruction of natural resources. The environment is important to me, and responsible personal finances are important to me, but I have never seen the link between them set out in such a concise way.
I was also struck by the section on clutter in the first chapter. The book’s views are remarkably similar to the Konmari method, which I have been working on recently (and am finding to be ‘lifechanging’ as claimed!).
There is also a lot of overlap with current trend of mindfulness. The book essentially promotes mindful spending, although they don’t call it that – they call it ‘consciousness’.
The success of the program essentially turns on the authors’ unique definition of money. According to this book, money is something we choose to trade our life energy for. When you consider every hour you work and every penny you spend as a unit of life energy – your most precious commodity – you will make better decisions. That’s essentially what the book boils down to. The nine steps are all designed to help you appreciate and assess the use of your life energy.
I’m probably making the whole ‘life energy’ thing sound a bit hippy-dippy now, but I promise it’s not like that at all! One great thing about this book though is how it can appeal to people living (or aspiring to) both traditional and alternative lifestyles, by combing solid and practical financial advice with some more offbeat thinking. Yes, some parts are kind of quirky, but to me that comes across as charming and original thinking. Your mileage may vary!
Serious though the topic is, I found this book to be actually witty and fun to read. I enjoy how the authors will call you out on your bad financial habits with a kind of cheeky knowingness.
I also LOVE the two steps on p142:
- Keep going
They are talking about tracking your finances, but isn’t that brilliant? You can apply it to so many other areas of life too. In fact, I think it might become my new mantra!
I like this book. More than that, I think it’s a very valuable book, which potentially can be life changing. I borrowed my copy from the library (frugal!) and had to return it. But, I decided to actually buy my own copy to refer to as unmake my way through the nine steps in future.
The program presented in the book is not easy. It will take time and commitment to work through. But it has given me a lot to think about already. I can tell that even doing one or two of the steps will have a real impact on the way I think about my own money. I really believe that following the whole program through will lead to eventual financial freedom!
Hint: the premise of this book is basically the same as the fantastic blog Mr Money Mustache, by a guy who retired at 30 thanks to a combination of extreme frugality and stable investments. If you are interested in reading more about this lifestyle but don’t want to buy the book, I recommend starting with MMM.
Boost My Budget Rating
This book is a classic for a reason.
Here are some of the personal finance and money related titles on my reading list. Have you read any of these? Any more recommendations for me? Come back soon for more reviews!
- A Random Walk Down Wall Street by Burton G. Malkiel
- The Millionaire Next Door by Thomas J. Stanley and William D. Danko
- The Millionaire Teacher by Andrew Hallam
- It’s Not About The Money by Brent Kessel
- The Millionaire Mind by Thomas J. Stanley
- The Richest Man in Babylon by George S. Clason
- Rich Dad Poor Dad by Robert Kiyosaki
- I Will Teach You To Be Rich by Ramit Sethi
- Rich Bitch by Nicole Lapin
- The $100 Startup by Chris Guillebeau
- Money, A Love Story by Kate Northrup
Disclaimer: this post contains affiliate links. All opinions are my own!