Your Money Or Your Life was originally published in 1992 and has appeared in several revised versions since then. Your Money Or Your Life was a phenomenon, almost immediately translated into eleven languages and occupying spots at the top of “best book” lists for years to come. This book, subtitled “Transforming Your Relationship with Money and Achieving Financial Independence,” was co-written by Joe Dominguez and Vicki Robin. The whole purpose of the book is to change the way you think about your money and your relationship with finances in general.
Your Money or Your Life‘s website is more like a blog, a working guide to the principles spelled out in the book, along with helpful advice on simple ways to save money and to change the way you live now to make positive changes to your financial future. The blog is meant as a companion to the book itself, a way to continue learning how to alter the way you spend and the way you think about spending.
Here’s a guide to the best advice found in Your Money Or Your Life. I’ve tried to break down the most useful parts of the book into an easy-to-read collection of hints to help you transform your relationship with money and gain financial freedom.
1. Track Your Spending
If you find yourself curious about where all your money is going or want to see what areas of your spending need attention, Your Money Or Your Life teach you to track your spending in detail in order to make the necessary changes.
Tracking your spending won’t come naturally to you, especially if you are having trouble with finances. You’ll have to buckle down and start recording the date of every purchase you make, what you’re buying, the category for the purchase (“gas” or “groceries” or “entertainment”), and the total of the bill broken down into any further sub-categories you can think of. The idea is to come up with a mountain of data about your spending that you can analyze later, so the more you write down and categorize, the better.
2. Analyze Your Spending & Make Changes
Even if all you take away from Your Money Or Your Life is the need to keep track of your spending, you’re doing yourself a huge favor. Once you have specific information about your monthly spending habits, it’s time to make the kinds of changes that will have a lasting effect on your understanding of your finances.
For some, taking a close look at their monthly spending might be unpleasant. The advice in the book is to repeat the mantra, “No shame, no blame.” You can’t do anything about the past, but you can make changes into the future.
Easy changes to your spending will jump out at you after just a few days of tracking your expenses. For example, most people spend the majority of their money on housing, either a rental payment, a mortgage payment, or some other housing-related expense. But coming in at a close second is the expense of groceries and eating out. Once you notice just how much you’re spending on groceries, it may be time to consider coupons and couponing. These are the kinds of simple changes that Your Money Or Your Life shows you how to make. The idea is that changing the way you think about spending is the best way to actually change the way you spend.
Your Money Or Your Life challenges you to change the way you think, not just change the way you shop by cutting out coupons. That’s why tracking all of your spending and then analyzing that data is the best advice you’ll read in the book. Getting out of your comfort zone and actually tracking every penny that you spend may be the first time in your life that you’ve ever actually spent a considerable amount of time looking at your money. That kind of change, a change in your thinking process about money, is what the book is all about.
3. Understand Your Life Energy
One of the most important concepts in Your Money Or Your Life is what the authors call Life Energy. Changing the way you think about money means changing the way you think about work. Most people go through life assuming that they have to work a traditional 9 to 5 job until they turn a certain age, then they’ll retire, buy an RV, and struggle to survive on their retirement savings and income. But it is critical, according to YMOYL, to change that thinking process in order to avoid that outcome.
The book says that “Our life energy is our allotment of time here on earth, the hours of precious life available to us. When we go to our jobs, we are trading our life energy for money.” To start thinking about your working life as hours traded for money is to totally alter the way you think about finances. The book goes into great detail to help you work out exactly how much your hours are worth, or, as the book puts it, to work out “how much life energy you are trading for how much money.” Your Money Or Your Life teaches you to think about your job in terms of its ‘real hourly wage,’ and not a number or a salary. Your real hourly wage is a calculation the book will walk you through to help you figure out if you need to make a major change to your career in order to change your financial future.
The book does an excellent job of describing the Life Energy concept, too complex to be spelled out here. Suffice to say that Your Money Or Your Life attempts to show you how just thinking differently about aspects of your financial life can affect change, and that includes thinking differently about what it means to have a job or a career. Yes, you’ll track your spending along the way and make small changes, like using soft drink coupons to lower your grocery bill, but the book is about something bigger.
Your Money Or Your Life has been revised and translated over and over, spreading the book’s tenets and new ways of looking at money all over the world. The above three pieces of advice are the core of the book, and following just these three simple suggestions can lead to big changes in the way you run your financial life.