Book Review: Your Money Or Your Life

Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence By Joe Dominguez and  Vicki Robin.  2nd Ed. New York: Penguin Books. 1999. There are two kinds of financial books: those that delve into deep principles and theories of financial success, and those that deal strictly in the realm of practical specifics. This book falls squarely in with the latter. While an eighteen-page preface explains the underlying principles, this book does not spend time theorizing. It is a very straightforward exposition of a single, nine-step process to be “Financially Independent.” The authors make some audacious claims. If you follow all nine steps, they say, you will almost immediately see a 20% reduction in expenses and you will progress to the point where you are Financially Independent: able to quit any day jobs and still support yourself at your current level of living or higher. This plan involves two phases: First, a simultaneous reduction of expenses and an increase in income; Second, a carefully designed investment vehicle using your savings as capital. The end result of their plan is living off of the interest earned from your investments.

This book contains a number of useful ideas: Tracking every cent that comes in and out of your life, carefully evaluating expenditures to see if they fit your life values, living within your means, and making wise, secure investments. Many of the ideas in this book, however, could be profoundly negative (if followed without regard to the whole program): Living without any budget, investing only in U.S. Treasury bonds, dramatically cutting expenses.

Originally written in the 1990’s, this book is insufferably out-of-date. Filled with cultural clichés, it feels like reruns of a bad sitcom. From the title to the chapter headings to the examples used throughout, the authors bent the text to popular culture of the day and as a result lost the ability to remain timeless and relevant. The book feels old and irrelevant. Furthermore, the book does not address the advent of the internet and how it can impact finances. It recommends not keeping your financial records on the computer—a good suggestion given the state of computers in 1992, but a poor one today, when internet banking and computerized accounting can save you time and money, with fewer errors and far more convenience than paper-based accounting. Many of this book’s checklists and examples are irrelevant, nostalgic throwbacks to a decade we’d rather forget.

The largest problem I have with this book is its underlying philosophy. The author’s background lies in the liberal, environmentalist community and this book is built on a reaction and resistance to the rampant consumerism so evident today. The book makes the case for being frugal as an opportunity to benefit the environment and ultimately reduce global consumption.  The proposed nine-step system leaves no room for God. It is quite self-sufficient and is essentially an environmentalist humanism.

Because of its philosophical basis, this book does not make use of the significant principles for finances found throughout Scripture. It takes the approach of “God helps those who help themselves,” not “God helps those who are helpless.” In this respect, it utterly fails as a good resource for those seeking to improve their financial situation.

Overall, the book had some good ideas; ideas I am sure I will use to some success. But the book is not worthwhile, in my opinion, and there are many options that have a better basis, are written in a more relevant manner and are less dogmatic.