In the new edition of Your Money or Your Life, authors Vicki Robin, Joe Dominguez, and Monique Tilford encourage readers to rethink the way they value time and money. Is your job sucking your "life energy" away from you? And perhaps causing you to waste money on distracting television shows and other forms of entertainment? By pressing readers to think about what's fulfilling rather than what's lucrative, this book encourages a more thoughtful approach to personal finance. I recently asked Robin to answer a few questions over E-mail:
What's different about this book compared to other personal finance books?
There are three big differences:
- Most financial advice assumes that "more is always better" -- more income, more possessions, more status and prestige and fame and influence. We help people answer the question, "How much is enough?" and give them tools to live at this optimal "enough point" consistently. They realized that in many cases, beyond this "enough point" more isn't better -- it actually diminishes quality of life through stresses of work and managing portfolios and possessions.
- Most financial advice is based on budgeting -- setting fixed spending targets and staying at or below those targets. While a good way to get spending under control, this approach is restrictive rather than empowering. We help people discover what their own spending patterns are and then evaluate for each spending category their "enough point" - that Goldilocks experience of not too much, not too little but just right. Our approach is awareness-based, not budget-based.
- Most financial advice assumes that money is the only currency for getting your needs met. Our approach helps people discover what needs are best met through purchasing something, and what are best met through maintaining what they have, bartering with others, applying their creativity rather than their cash to problems and often through psychological and spiritual approaches to satisfaction. We are complex and social human beings and the dominant economic model monetizes all transactions, making the wealth that comes from the inner life, family life and community life invisible on the balance sheets.
How do you think the recession is impacting people's spending and saving habits?
In the fall of 2008 many people were frozen in their tracks, not knowing where the economy was headed and unsure of how it would impact them. In the first few months of 2009 people began looking for bargains, adjusting expectations, realizing that life will go on and hoping that Obama will lead the way to recovery -- so there is less fear-based behavior.
How has your advice changed since you wrote the 1991 version of this book?
The basic 9-step program is the same. It is classic practical money wisdom. We did adjust the Chapter with hints and tips for saving money to reflect the changes in the culture (online shopping, green consumption, social justice concerns) since we developed the program in the 70s and 80s. We also adjusted the chapter on investing money to widen readers understanding of investment vehicles for their nest egg accumulated through following the steps.
Why do you use the phrase "your money or your life" - what does that mean?
Life is what is important! Our earning, spending, saving and giving should reflect our highest aspirations and deepest desires for "the good life." In our consumer culture, the cart is often put before the horse. Money becomes all important. We invest our sense of identity in what we do for money. We measure our success by our paycheck and our portfolio. Money has become the way we keep score. We accumulate and hoard and protect ourselves from life's uncertainty through walls of money. Our goal - personally and in the book - is to put money in service of life rather than our lives in service of money. The title also refers to that old Jack Benny (the ultimate skinflint) skit where a thief points a gun at him saying "Your money or your life." There is a long pause. A very long pause. The thief threatens him again and he says, "I'm thinking, I'm thinking."
Where did these ideas, like the concept of 'life energy,' come from?
Thoreau said long ago that he considered a thing to be worth the life energy put into it. Perhaps back then he meant craftsmanship. We say money is "life energy" because you invest a portion of your all too short life in every dollar you spend. When you think of a purchase price in terms of life energy, you suddenly evaluate whether it's really worth spending your life making the money to pay for it. You go from "I want it' to "does it merit a place in my life."
It seems like many people might read your book and decide they want to switch jobs. Do you think it often has that effect?
There isn't one cookie cutter result from reading Your Money or Your Life. Some people stay put. Some trade up to higher paying jobs so they can get out of debt and save money more quickly. Some people resist promotion and even take lower paying jobs because they want to be fulfilled in their jobs, even if they earn less. And quite a few people discover that they actually have far more money than they realized and are already financially independent. They may continue to work, knowing they don't NEED the money - or stop working for pay and invest themselves in creative or service or adventuresome or self-development pursuits.