Your Money or Your Life: Key Takeaways and Lessons Learned

I’ve been (re) reading Your Money Or Your Life, by Joe Dominguez and Vicki Robin, and I’m glad I did, as is often the case, when you re-read a book that you read at an earlier life stage. I’m a different person now, and I understand some of the concepts in the book differently. Here are my key takeaways from this time around.

Money Really Is Life Energy

I’ve been hearing this ‘money is just energy’ philosophy forever, and generally considered it a big vague and woo-woo. But the way it’s presented in this book, it’s easy to see how money really is energy. You use your life, your time, and your energy to earn money, so when you spend it you really are spending the energy it took to earn it. This time around I started to think about this concept in a very concrete way.

If you make $30 an hour and spend $60 on going to a play or concert that lasts two hours, you traded two hours of life energy for two hours of entertainment. If you spend $300 on a winter coat you absolutely love, that’s ten hours of life energy you traded for it, but it’s potentially going to keep you warm for way more than ten hours, this winter alone, never mind all the future winters you’ll be wearing it.

Only you can know how much life energy you’re willing to trade for each thing you buy, but it’s certainly an interesting way to look at money. Some purchases will suddenly feel like absolute bargains, and some will seem ridiculous. Your life energy is precious. Spending wisely is a natural consequence of thinking this way for many people.

More Is Rarely Better

We live in a world where the advertising industry needs to persuade us that more is always better. Buying more, doing more, spending more. For a while now, I’ve been on a quest to do less, but better, so this concept hit home harder than on my previous read.

The authors report that in their seminars almost everyone they ask says they need more money. When asked to estimate how much, the answer is usually between 50% and 100%. Current salary has little or no impact on the answer to this question. We all want more, or think we do, no matter how much we have.

If everyone thinks they need more than they have, it’s unlikely that’s based on any true ‘need’ or even ‘want’. There are a few things at play. The aforementioned advertising industry is one of them. Remember, companies wouldn’t need to spend so much on advertising to persuade you that you want their products if you actually did. Lifestyle inflation is also to blame. So is hedonic adaptation. You almost certainly need (and want) less than you think you do.

The Importance of Clarity

The authors suggest that we all need clarity on our past financial life, and we can get that by looking back at our life to clearly see our past behaviour around money. It’s important that you do this with what the authors refer to as a ‘no shame, no blame’ attitude. You’re not beating yourself up over past mistakes. But you are identifying them so you can avoid them moving forward.

The suggestion in the book is to add up your total lifetime earnings (I did a rough estimate, though if you have the right records you can probably be a lot more accurate). Then add up your current net worth (investments and possessions), to see what you’ve got to show for all that life energy spent.

As someone who spends on ‘doing’ more than ‘having’, I decided to factor in life experiences here. I’m glad I did. Factoring in all the amazing things I’ve done with my life, including travelling all over the world, actually made me feel that I’ve been spending my life energy well. My net worth alone definitely wouldn’t have given me that feeling!

Keeping Track

Once you have clarity, keeping track of your financial life going forward is vital. Knowing where your life energy is going will help you make better decisions, short term and long. One of the biggest changes since I last read this book is my attitude to keeping a financial journal. I’m sure the first time I read it I glossed over that part pretty quickly. It seemed like a lot of effort.

Now I tend to suggest that everyone focused on improving their finances keeps a financial journal. I even have a specific one I recommend, though there are also apps that do a similar job. It’s a great way to keep an ongoing sense of clarity around your financial life, and will make assessing your finances on an ongoing monthly and yearly basis (also recommended in this book) much easier.

Interested in reading the whole book? You can buy it on Amazon, or listen to it on Audible.

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen