Now, this is something I don’t usually do: turn the microphone over to someone else, here on my site, but this is an interesting situation. Amy Young from the United States Center for Consumer Finance Education contacted me a while back and offered to provide some information for my website, to help promote the work the Center does, educating consumers about credit, finance and other money matters. I certainly think it’s a worthwhile enterprise, but this is a book site — I told Amy that if she could give me a post about a book, I would consider it. So, today I’ve got Amy’s review of Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence. It’s not the kind of book I’ve reviewed here before, but it’s certainly the sort of book I should probably read!
I have read some great books on financial planning, but Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence has to be the best by far. The author, Vicki Robin, recently revised her original text to apply to more recent financial struggles, but the content has mostly stayed the same.
The nine step program Robin encourages readers to follow makes more sense than instructions found in other financial self-help books. The following list summarizes each step.
- Make Peace with the Past – Add all of the money you have made in your life, and then total your amount of assets. Finally, now you can see if you can account for everything you have earned.
- Begin in the Present – Determine how much money you truly get for the energy spent at your job (including commuting, clothing, meals at work, etc.).
- Where is it all Going? – Calculate your expenses in different categories, and use your totals to see how many “hours of life energy” you are using to pay for them.
- Three Questions – Do your expenses provide you with fulfillment? Are they in alignment with your life’s purpose? Would all of this change if you did not have to work? Come up with your life’s mission and know exactly how much your time and energy are worth.
- Make Life Energy Visible – Keep a chart with your income and expenses for the month and put it in a place where you will see it often.
- Minimize Spending – Live frugally and find ways to save money (i.e. take care of what you have, anticipate your needs, buy used, etc.). Don’t use the money you earn to try to impress other people (i.e. shopping, living above your means, etc.).
- Maximize Income – Research new ways to increase your income. Value the life energy you put into your job, and make sure you are being compensated equally for your health and integrity. Money is a way to value your life energy, and we all deserve exactly what we put into our jobs.
- Capital and the Crossover Point – The crossover point is the time when your expenses can be paid through the income of an investment. Use capital money to produce an income until you reach that point.
- Managing Your Finances – Make yourself a knowledgeable long-term investor and manage your finances wisely. This will lead to a steady and sufficient income for the rest of your life.
Amy Young is the author of articles relating to business and financial problems such as renting and buying a home.