Review of “Your Money or Your Life” by Vicki Robins

Introduction

Vicki Robin’s book Your Money or Your Life is a classic in the FIRE movement. It was first published in 1992, but a new edition was released in 2018 (that’s the one I read). My library didn’t have a copy, so I waited several months to get my grubby little hands on it through an inter-library loan. After reading about it indirectly for the better part of a year, I was anxious to dive into the nitty gritty details of the (in)famous wall chart, and being the data-loving nerd I am, I have started tracking every penny in and out of my life as Robins recommends. It’s been WONDERFUL.

Main takeaways

Conscious consumption instead of budgeting

Robins recommends “conscious consumption” instead of making a budget, which will appeal to more people, as budgeting often gets a bad rap. She tells us to track every cent going in and out of our lives – not just expenses like housing, food, etc., but also the gain/loss on your investments and random change you find in the couch. Then at the end of the month you calculate all the cash you have in all of your accounts. The money you have now should equal the money you had at the end of last month plus your monthly income minus your monthly expenses. Note the error between what you’ve calculated and what you actually have; the goal is to follow every penny. Once all your spending is laid out like this it’s easy to see where money is leaking out of your life, and you will naturally start to reduce this waste. Tada! Now you’re saving!

“You spend less not just because you are a tightwad. You spend less because you become a more skillful, loving, sharing, caring, giving, receiving human – and simply need less of your own stuff to get by.”

We trade life energy for money

Another key concept is the idea that we obtain money by trading our “life energy”, and life energy is our most cherished commodity, as it is in finite supply.

“Here’s the only thing you can say that is always true for you, 100% of the time: money is something you trade your life energy for. You sell your time for money… the only real asset you have is your time. The hours of your life… You sell some of those precious hours for this (waves the hundred-dollar bill) – this has no meaning; your time is where all meaning and value lie.”

The book goes into quite a bit of detail to help you realize your true hourly wage, aka, what you earn per hour of life energy. Here’s a hint: it’s not the hourly wage on your paycheque. Robins draws attention to all the things we have to do to earn that wage – commute, buy and maintain work clothes, go to corporate functions, unwind after work to recover, and more. Once we know all the hours our job actually takes from us, we can calculate our “real hourly wage.” We then use this wage to determine the true cost of the things we buy in terms of the “life energy” we spent. Once you know that, you can start asking the tough questions when examining all of those purchases you’ve been tracking:

  • “Did I receive fulfillment, satisfaction and value in proportion to life energy spent?”
  • “Is this expenditure of life energy in alignment with my values and life purpose?”
  • “How might this expenditure change if I didn’t have to work for a living?”
  • From a sustainability perspective, what would happen to the planet if everyone in the world made the same choice about this expenditure?

Then she suggests scoring the expenses with a + (increasing this expenditure would be even better), – (not a good use of life energy), or 0 (just right). As Robins says, “The point is to adjust your spending until you have zeros or pluses for all your categories.”

This part of the book really got me to reflect on my values and purpose. What would I do with my time if I didn’t have to work? If I only had a year left to live? What would I do for free?

Use the Your Money or Your Life wall chart to track progress and stay motivated

The best part of the book in my opinion is “The Wall Chart”. I’ve made my own example above. This chart has each month along the x-axis, and money on the y-axis. You have three lines: One for your income, one for your expenses, and one for the passive income your invested funds would generate (if following the 4% safe withdrawal rate, this would be 4%/12*[investments] every month). I particularly like that you only use the part of your net worth that is working for you (ie, your investments, not the equity in your house) when plotting your wall chart as it makes it more realistic. As Robins says, “At the crossover point, where monthly investment income exceeds your monthly expenses, you will be financially independent in the traditional sense of the word.”

Critique

Robins is pretty adamant that to get the full value out of her book you should follow all the steps. “Step 1: Making Peace With The Past” tells you to calculate how much money you have ever made in your entire life. And then to calculate the value of every single object you own that you think you’d get more than $1 for, to see what you got out of all that money. An epic undertaking to say the least. Personally I don’t feel I need to do this step. I know I have too much crap; that’s partly why I’m moving toward minimalism. Right now I’d rather spend the little free time I have minimizing, working on my side hustles, and keeping that awesome wall chart up to date.

My favourite quotes

About your perspective

“You’ll put your life in service to your values rather than putting your time in service to money.”

“Be in life, not in the prison of a job.”

“Once you catch on to what clutter is, you’ll find it everywhere. Isn’t meaningless activity a of form of clutter? How many of the power lunches, cocktail parties, social events, and long evenings glued to your screen have been clutter – activities that add nothing positive to your life?”

“…some people would say that once we’re above the survival level, the difference between prosperity and poverty lies simply in our degree of gratitude.”

“In our early seminars in the 1980s we’d collect data from participants and analyze it on the spot to reflect the audience back to itself… Correlating participants’ income with “how much would it take to make you happy”, almost everyone, in every income bracket, said: 50 percent more than I have now. When asked to rate their happiness on a scale of one to five, there was no significant difference between the top and bottom earners. You could hear a pin drop as people realize that the person in the road ahead of them probably had the “more” they thought would make them happy – and it made no difference.”

About frugality

“Frugality is enjoying the virtue of getting good value for every minute of your life energy and from everything you have the use of.”

“Waste lies not in the number of possessions but in the failure to enjoy them.”

“To be frugal means to have a high joy-to-stuff ratio… we don’t need to possess a thing to enjoy it – we merely need to use it.”

About work

“Growth potential, communication channels, interest in work, and recognition make a job satisfying – not pay.”

“Redefining work as simply any productive or purposeful activity, with paid employment being just one activity among many, frees us from the false assumption that what we do to put food on the table and a roof over our heads should also provide us with our sense of meaning, purpose, and fulfillment.”

“Work should be in alignment with your purpose in life… Do your job without giving up yourself and who you are. You are not your job and what you do.”

“You’d be surprised at the degree to which job satisfaction lies in the worker, not in the work.”

“How could you double your income without selling your soul or compromising your health?”

“Think about what would happen if you knew that you would have to work for money for a limited, foreseeable length of time instead of that vague limbo of working until traditional retirement. You would still appear to be working for your boss, but you would know you were working for your own freedom.”

Conclusion

Robins says that there are three “bones” of the FIRE movement: frugality, simplicity, and self-sufficiency. After reading her book I think she missed “meticulousness”, as her method involves quite a bit of data collection and reflection. However I truly believe that following the exercises in this book will “transform your relationship with money”, as the subtitle proclaims. From my own perspective, I know the wall chart is a lot of work, but all three lines on it are hella motivating. It makes me want to reduce expenses, increase income, and grow those savings. And it keeps me accountable every month. In short, I highly recommend reading the original text. It’s a classic for a reason. To whet your appetite, Robins has an extensive summary on her website, Your Money Or Your Life.

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