I’ve always believed that the beloved personal finance book “Your Money or Your Life” (Penguin, $17) was slightly mistitled.
Written by Vicki Robin and Joe Dominguez, the book was updated and rereleased this month, but even when it was first published in 1992, I thought the “or” should have been an “and.” So it should have been “Your Money and Your Life.”
Yes, of course, I understand the appeal of the way the title is actually worded. It instantly evokes a bad guy pointing a gun at a soon-to-be-victim in countless “B” movies. And people of a certain age will remember that it doubles as one of comedy’s funniest straight lines, thanks to Jack Benny.
(In a skit, when a robber says to Mr. Benny, “Your money or your life,” the comedian — known for playing a penny pincher — pauses seemingly forever. When the robber repeats the line more emphatically, Mr. Benny responds with exasperation, “I’m thinking it over.”)
So far be it from me to change the title, but mine would have been more accurate because the book is all about figuring where money fits into your life.
Here’s what makes it different and, I think, explains its success and also the reason some people gush over it: Some even say it has changed their lives. (I am not one of them, but more on that later.)
Most personal finance books focus on how you can pay for the lifestyle you already have or to which you aspire.
Ms. Robin — who updated the book on her own; Mr. Dominguez died in 1997 — and her co-author turn that approach on its head, emphasizing that it is far easier to achieve financial independence if you are a minimalist. (As Ms. Robin points out in the new introduction, the book meshes with her long-term work in the sustainability and simplicity movements.)
If you have a dependable car, instead of a luxury one, a cellphone that does what you need it to do and no more, and live in a house that suits your needs, instead of something larger, your expenses are less and you don’t need to make as much money from either your work or your investments.
Those examples are mine, but they are the sorts of things the book discusses throughout, always ending the discussion with some variation of the question when it comes to material goods: “Is more really better?”
To help readers answer that question, the authors ask them to calculate to the penny how many hours they would have to work to pay for anything they are thinking of buying, whether it is a night on the town or a new couch.
They’re betting that doing that kind of sobering arithmetic will reduce the amount of money you spend. “Looking around at your accumulation of stuff, you can ask, ‘How many hours of my life did I invest to have this chair, car, mismatched set of cookware.’”
If you consistently do the math, you may decide you have “enough,” the financial state that the book says you should be aiming for.
What is enough? “We have everything we need; there’s nothing to weigh us down, distract or distress us, nothing we’ve bought on credit, have never used and are slaving to pay off,” the book says. Enough is “an honest and self-observant place. It’s appreciating and fully enjoying what money brings into your life, and yet never purchasing anything that isn’t needed or wanted.”
When you understand what enough is for you — and obviously it will vary by person — you can, in the words of her subtitle, transform your relationship with money and achieve financial independence.
Everything is not binary
I have always had problems with the book. For one thing, there really isn’t much investment advice — it gets about 10 percent of the space, and what is there tends to be general. Yes, telling people to use index funds and diversify their holdings are good ideas, but details are lacking. Which funds, for example, and how much of your assets should be where?
But since it wasn’t intended as a traditional investment book, I don’t much fault it there. What truly bothers me is the focus throughout on how people can afford to stop working as soon as possible so they can fulfill their true potential. The authors never really acknowledge that there are people who can make a pleasant income doing what they love, often using some of their paychecks and free time to make the world a better place.
In addition, the authors’ default position seems to be that when most people make what they would describe as an unnecessary purchase — such as buying a new home when their current one is adequate — it is done either to satisfy some emptiness in their soul or to impress their friends. It could also be that they want to move into a better school district so their kids can benefit, or some other meaningful reason.
And after a while, I found the tone hectoring. Here’s a representative comment describing how the authors feel about the way most of us live: We are “caught in a consumerist money culture that may feed our greed, but not our real needs for being connected, respected and protected.”
All that said, I understand the book’s allure.
Simplifying your financial life sounds great, no matter how much you make, and having someone point out that you may already have enough — or can get to that point, with a bit of work — is appealing, especially if you have always considered yourself not to be well off.
Those are good things.
As is anything that helps you seriously consider every purchase you make. After all, the less you spend, the more you have, or as the book puts it: “The more you save, the sooner you are financially independent.”
That may be the best relationship with money of all.