By Joe Dyton, WCI ContributorThe book, Your Money or Your Life(YMOYL) by Vicki Robin and the late Joe Dominguez is one of the most well-regarded books in the personal finance space. I’ve heard of the book since I took an interest in personal finance, but I only recently read it after I finished another book in the arena—Financial Freedom by Grant Sabatier. His high praise for YMOYL (he credits the book for helping change the course of his life) finally pushed me to read it myself.
Summary of Your Money or Your Life
For anyone unfamiliar, YMOLF, subtitled, “9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence,” encourages the reader to look at their relationship with money and then ask a key question—what’s more important: your money or your life? Given that most people would pick the latter, the book walks the reader through these nine transformative steps:
- Making Peace with the Past
- Being in the Present—Tracking Your Life Energy
- Monthly Tabulation
- Three Questions That Will Transform Your Life
- Making Life Energy Visible
- Valuing Your Life Energy—Minimizing Spending
- Valuing Your Life Energy—Maximizing Your Income
- Capital and the Crossover Point
- Investing for FI (financial independence)
Although the book’s premise revolves around this question, it does not make the reader choose between their money or their life, as evidenced by this passage on Page 4:
“There is a way to live an authentic, productive, meaningful life—and have all the material comforts you want or need. There is a way to balance your inner and outer lives, to have your job self be on good terms with your family self and your deeper self. There is a way to go about the task of making a living so that you end up more alive. There is a way to approach life so that when asked, ‘Your money or your life?' you say, ‘I’ll take both, thank you.'”
Rather than make the reader choose, Robin and Dominguez construct a road map that lets the reader come to that determination on their own while achieving financial independence.
More information here:
A Fool and His Money: Does This Classic Book Still Hold Up?
A Wealth of Common Sense by Ben Carlson – Book Review
What Makes Your Money or Your Life Credible?
There is no shortage of personal finance books at our disposal today, and it sometimes can be difficult to determine which ones are worth our time and money. What puts YMOYL in the “worth it” column is that the authors both lived what they wrote about. Dominguez, who sadly lost a battle with cancer at age 58, managed to retire from his financial analyst job at 31. Some may consider him the original Mr. Money Mustache. Robin met Dominguez after his retirement, and they discovered it was possible to live on a portion of the money that a household typically spends. They achieved financial independence by following the nine steps covered in the book before leading seminars and recording cassettes to teach others how to reach FI before writing YMOYL.
The fact that they could retire from following the steps they’d later teach others rather than the money made from book sales further cements the authors’ credibility when it comes to personal finance.
Pros of Your Money or Your Life
There’s a lot to like about YMOYL. What I liked most was the simple way it made me think about the way I spend money. It in no way made me feel bad about buying things or even suggested that I don’t.
You’ll notice that four of the nine steps in YMOYL have the words “life energy” in them. That’s because the phrase is a central theme in the book. Robin and Dominguez note that “money is life energy.” It’s something we trade our life energy for. With that in mind, they ask the reader to consider how much “life energy” it costs to make a purchase.
The life energy formula comes from breaking down your hourly wage—not just what it says on your pay stub but also how much time you spend commuting and how much money and time you spend on items and activities that help you decompress from the workday. Depending on what your on-paper hourly wage is, after taking all of this into account, you could actually be making $10 an hour. With that figure as an example, a $100 purchase would cost you 10 hours of life energy.
Rather than saying, “Don’t buy that!” the authors encourage you to think about whether that purchase is really worth the 10 hours you spent getting to work, doing your job, and decompressing from it. Meanwhile, a relaxing $1,000 vacation might be well worth the 100 hours of life energy you’d have to spend to take a break from the daily grind.
“Knowing that money is simply your life energy puts you in the driver’s seat of your money life,” Dominguez said. “How much of my life am I willing to sell to have money in my pocket? Looking around at your accumulation of stuff, you can ask, ‘How many hours of my life did I invest to have this chair, car, matched set of cookware, diploma on the wall?’ See what this does to your next purchase.”
Again, the authors aren’t asking the reader to stop spending money but rather to take time out to think about how much they’re spending to get it in more than just dollars. It’s a refreshing change from other personal finance guidance books that forbid “unnecessary” purchases of any kind.
Cons of Your Money or Your Life
It was honestly hard for me to find faults with YMOYL. I feel it is a great personal finance resource for people who need help getting their finances on track, want to make more money, or need some guidance when it comes to investing.
The book isn’t for everyone, however. That’s not so much a criticism as much as it is a point that people who are further along in their FI journey might not get as much out of YMOYL as those who are new to the concept. I think most people can get something out of this brilliant personal finance book, but those who have a good handle on their spending, saving, and investing may be better served spending the life energy it would take them to read a 300-page book on one that can truly enhance their personal finance knowledge.
Although I know these nine steps worked for Dominguez, Robin, and their countless readers and students, the second half of Step 2—Keep Track of Every Cent That Comes into or Goes out of Your Life—could be a little overwhelming for someone who hasn’t put a lot of attention on their finances in the past. I get that this is a critical step in the process. But as I was reading, I could not help but wonder how many people got to this step and gave up because the idea of tracking every penny they spent and or made might seem too daunting.
More information here:
Your Money or Your Life with Vicki Robin
Overall Impression of Your Money or Your Life
There was much more to like than dislike about YMOYL. As someone who’s read a fair amount of personal finance books, I believe the praise this one has received since it was first published in 1992 is more than warranted. Anyone who’s looking to get out of debt, improve their spending habits, learn how to make more money, and set up their investments so they no longer have to work for a paycheck again (or all of the above) can benefit from this book. It provides a clear roadmap on how to do each of these things, and it shares real-world examples of people who’ve put these steps to work for their financial benefit.
This book would be a great gift for a recent graduate who is just moving on to the next chapter in their life, whether that’s more schooling or their first job. It’s also ideal for someone who wants to improve their financial situation but isn’t sure how to do so.
I'd give it 4.5 out of 5 stars.
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It’s the 2018 that’s bloated and drags on. I prefer the more concise original version, regardless of certain things being “out of date”. I preferred it as a philosophical guide, rather than the 2018 version which attempts to be an “all you need to know”.
I read it many years ago and gave a copy to my then 21 year old eldest daughter.
It took sorting, donating, selling, packing, and moving all of our cumulative purchases, and doing all this again after moving for the message to sink in.
Now, I’m a 58 year old, semi-retired anti-consumer. I specifically think about every non-food, non-essential purchase as a potentially life stealing decision, because it’s true. If I spend too much, I’ll have to work more.
I haven’t bought anything substantial since we started packing back in April. I pay my bills and try to reduce them if possible. I use an app to track my spending and subscriptions in order to boot any I don’t really use and enjoy.
I had to buy a power line Internet extender to get my WiFi to go to the far reaches of our finished basement for my “telehealth only, no commute, two day a week” job.
Every time I go into a store now and think about buying something, I get nauseated. I avoid the Knick knack shops in all the towns we visit and sit outside instead.
I invest my excess cash for yield and love seeing the money from money come straight into my account. I may never buy anything non essential ever again. I know, I’m full of it, but I can dream.
I’ve got vacations lined up in October, November, and am looking for one for Spring. I’m willing to spend vacation money. Today we are doing free Yoga at a vineyard, then buying a bottle to sip on the mountain there. That will be money well spent.
The most fun activities I’ve had this week have all been free (hiking, fitness, vineyards) unless we bought a drink.
The only way I could be more happy is if I’d saved even more in order to fully retire at 58. Instead, I spent it on crap that is now at Goodwill or in boxes…a lot of which is waiting to go to the garbage or Goodwill. At least my kids won’t have to clear out this consumer folly when I die. I can dream.
Joe was a brilliant, generous, and funny man. You would have loved him.
To my knowledge he was the first to ever write about “FI.” So I believe he coined the term we all use.
He thought clearly about whether to take unnecessary investment risk. Having worked in Wall Street he knew the other side.
He taught people how to make passive income through investments to provide the option of cutting back from work.
The gazinga pin is what Kiyosaki called doodads. I’m not sure of the best name but it is an important concept.
The exercise of finding your wage would be helpful to most doctors. If you consider your total work hours, licensing fees, call, and charting your hourly pay may be less than you realized.
Another powerful tool he recommended was going through your spending and asking “is this consistent with my values?” “Did this give me the joy that was worth the four hours of work required to pay for it?” We could all benefit from such clear thinking.
I really benefitted when I first read it- 25? years ago- from the epiphany of how many work hours an item (plus any interest on a loan to buy it) cost me. Not certain if this idea also comes from YMOYL but the concept of you might have to work until you die if you don’t plan otherwise was also important in my finances.
Yeah definitely great book but hard to relate with the examples of money and budget given I am a high income professional. In the example where a girl tracks her budget, I spend more in a day than she spends in a year! Not sure if this book was updated for inflation but made it hard to relate although the point still shines through how making money is really at the sacrifice of life energy.
I read the original 20 years ago and loved it. As an hourly ER doc, I immediately understood “life force,” and ever since then I have related every spent dollar to how much life force I would lose. I still remember the paper spreadsheet of expenses taped to the fridge. There was no”Personal Capital” back then, and you’d be lucky if your credit card had a website.
Because of this book, I lived like a resident for a few years, paid off all my debt, and saved enough for a down payment 4 years out of residency. But then family life got complicated, and I lost my way. Not everyone could see the “life force” as clearly as I did, and I somehow ended up with a doctor house, a landscaper, and organic mattresses made of bees wings.
For the last 8 years I’m getting back on track, but now I find the concept of “life force” a minor hindrance. The link in my mind to hours spent working to dollar spent is almost too precise. If I don’t get the best deal on airfare, for example, I will think about my last night shift wasted.
Anyway thanks for the trip down memory lane. This book was meaningful to me at the time, but I think WCI etc. have basically taken the reins for now.
I read this book about 15 years ago – the original version – and it shaped the way I think about time/money balance. The exercise of figuring out your “real wage” was a game changer for me in how started thinking about the time purchases cost me. I’ve read many financial books, but this one is one of three I credit with helping me reach financial independence by age 44. I haven’t read the new version, but I recommend this book.
The YMOYL exercise in which you list your top ~5 values, then list your top ~5 spending areas, was what really stuck with me. Figuring out what I esteem and enjoy the most and making sure my spending maximizes that part has made my life better.
E.g.: Love to travel and explore on foot. Don’t really care about thread counts in sheets. Ergo, I get to travel more and stay in great areas by using hostels and room-rental AirBnBs.
I read YMOYL in 2018 and while I struggled with the New Age-y tone, the concepts have been fundamental to really getting joy from my spending. I highly recommend it.