Your Money or Your Life is a personal finance book that is very different than others. Like Dave Ramsey, it encourages readers to become debt free so they are not paying money each month (an ultimately paying much more) for something instead of using it for their immediate needs. If you would like me to review some more personal finance books, leave me a recommendation in the comments!
Examine the Roots
However, it differs in that it begins by demanding one to reflect on your current view and relationship with money. Do you see money as simply a means to gain things? How did the ways your parents managed money influence your spending habits? How much control do you have over your current spending or is all your money going to debt? Can you itemize where your money goes or do you often wonder exactly what did you spend your money on? Then the reader is challenged to distance themselves from bad emotions and baggage with money that they developed over their life.
Upon reading the first few chapters, I realized I have a destructive relationship with money. I spend without hesitation and without examining if this is a need or want, examining if it’s a dire need or something that I could shop around for to get a better price.
Next, the book challenges the reader to transform the way they view money. Money is not a piece of paper that you trade for a cup of coffee. It is a physical representation of your effort, time you sold; both of which are gone forever. Seeing money as “life energy,” as the book calls it, really drills in the notion that money equals time and work. I would very much rather put my effort and time towards the things I love, keeping all the proceeds to benefit my family, rather than working to make someone else’s dream come true.
Once the reader accepts this shift in perspective, the real financial advice comes out. First the authors suggest keeping track of every penny you spend for 1 month. Don’t try to set a budget but spend as you have been. This will show you where your money has been going and give you ideas on how to redirect it toward healthier spending habits to give you control and reach your goals.
Finally, the book gets into practical financial advice section. It talks about minimizing spending and maximizing income to grow your bank account then invest in “passive income.” This means investments, rental properties, and, in the modern world, things like blogs, YouTube, etc. Passive income is like an alarm clock— set it and forget it, reap maximum benefits with minimal work (life energy). Because passive income doesn’t require consistent effort everyday, it’s much more profitable than active income because you get the money and the time.
Overall, this book is one of the better personal finance books I have read. It is filled with practical advice, but in reality, you can find that advice in many other books and online. The value of this book comes from the perspective shift demanded from the reader, from seeing money as things to seeing it as your time and energy will make everyone stop and think before they spend.