I’ve finally gotten around to reading Your Money or Your Life by Vicki Robin and Joe Dominquez which I’ve had in my closet for almost 2 years. I had hesitated reading this book because I really thought that the original publish date was so outdated it would have antiquated personal finance information, but what I’ve found is that even though the data is old, the ideas and concepts behind the book still make sense today.
Concept 1: forget budgeting – similar to most diets, it doesn’t work in the long run.
Using dieting as an analogy, the authors make a point that budgeting is similar to a diet in that it’s meant to restrict you (in this case from spending money) and this can lead to feeling deprived and sooner or later you’ll splurge and feel guilty never really being able to stick to a budget.
Instead, using their 9 steps helps the reader make a lifestyle change – which works in the long run.
Concept 2: think about what really, truly makes you happy.
I’ve never been someone who goes shopping when I feel sad or like I deserve a treat, so many of their comments about shopping to fulfill a need were foreign to me. However, their point about thinking back to the dreams of childhood and remembering what you “wanted to be” or what you “wanted to do” are a good starting point for those unhappy about where they are in life.
The idea that things don’t make a person happy is one that I’ve always agreed with, but I like how the authors made a point to remind you to ask yourself, “Do I really need this? Is it worth the “life” hours it will cost me?”
Two of the nine steps have to do with tallying where your money goes and recording how you feel about your expenditures – neutral, positive, or negative. The idea is to find things that you really can’t do without because they make you happy and eliminate or reduce the things that aren’t as satisfying, which in the end reduces your expenses.
If anything this strategy helps remind me to ask my husband when he mentions another purchase, do you really need this? Or, can we wait on this or do without?
Concept 3: keep track of your expenses and income to the penny.
Okay, this sounds like budgeting, but instead of concocting a budget based on guesses or estimates or last months numbers, the authors suggest recording every penny for quite a while, then creating a large wall chart to visually see how you’re progressing. I’m combining steps 2 and 4, I think, but the bottom line is to really see where your money is going so you can make changes to your behavior.
These changes you make help you feel in control of your spending and over time change your behavior allowing you to never feel deprived.
I honestly don’t know if I’ll do the nine steps the authors suggest since I track my spending and expenses religiously using Quick Books (which creates charts for me to use as a visual), and I feel I live fairly frugally. However, the authors’ points encouraged me to pull some of my expense reports, sit with my husband and discuss where we can improve.
And that’s a great first step in and of itself.
I’m curious to know who has actually done these steps. Please share your thoughts and ideas if you have.