Your Money Or Your Life – Review of Best Personal FinanceBooks

In our first review of the best books on personal finance,we look at Your Money or Your Life.A wonderful book to start your finance journey
Your money or your life book review - financial independence program and FIRE

Make no mistake. Your Money or Your Life is an amazing book. This book single handedly has enlightened millions of mortals about better personal money management principles and financial independence.

It provided some time tested wisdom that kick-started an awesome transformation in my financial life and my decision making more broadly. I recommend this book in the highest possible terms.

At it’s core, it’s a book about changing the way we look at money and our relationships with money. It encourages us to spend in accordance with our true interests, to reduce our spending in areas which don’t provide us with happiness and to invest the difference.

Essentially it shows us a manageable way to attain financial independence and early retirement even when income is moderate but also why we should think about trying it in the first place.

 The concept of having enough

One of the central themes in Your Money or Your Life is understanding the point of enough.

There have been extraordinary excesses delivered to western nations since the industrial revolution but we have reached a point of competitive and unnecessary consumption that threatens our planet, our relationships with other people, our relationship with work and our mental health.

Vicki Robbins explains in very simple terms how to find what is enough for you, how to reassess your spending so that it’s no bigger than it has to be so that happiness is maximized and spending kept in check.  This concept has been particularly useful to me because for a long time I was trapped into the perilous trap of consumerism – Your Money or Your Life helped me understand that the excesses I was used to were actually delivering absolutely no increased level of comfort or happiness and was utterly pointless.

Needless to say, just this one aspect of the book alone has made it a worthwhile purchase many times over.

Money as energy

I was initially skeptical of this concept when I read it being discussed prior to reading Your Money or Your Life – but it makes perfect sense when fully explained.

The book encourages us to look at money not just as a number, but as a unit of our energy, or more broadly, as a unit of our remaining time on earth. It requires us to work out how much money we are truly earning from paid employment which involves going far beyond just deducting tax from our hourly rate.

It must take into account all work related expenses, like travel costs, uniforms, any health care necessary because of work – the lot. Everything you wouldn’t have to pay for if you didn’t do your job should be included.

Real hourly wage

The hourly rate you arrive at will probably be surprisingly low when all of the associated costs are taken into account.

Let me explain this a bit more.

Let’s assume that your hourly rate is $20, but after all of the appropriate deductions are taken into account, your true rate is $10 per hour.

Now when you face the decision of upgrading to the next model of iPhone which offers a small upgrade from your recent iPhone, and the new phone is going to cost you $1000. Stop! Think about the purchase in light of the cost in terms of your time or energy. The actual cost of the item is 100 hours of your life that you won’t ever get back.

It’s not to say that the book simply advocates for extreme frugality or that we should always do without. Far from it. It just encourages us to assess our actual priorities in life and to spend in accordance with them.

The natural extension of this idea of money as energy is that if we can accrue enough money and can live very frugal lives, then we can live without work and reach true financial independence. For me, it was an extremely exciting revelation that money represented my time both in terms of the work that went into getting it, but also that it represented a way to avoid working for the rest of my life.

9 step program

The Nine Step program outlined in the book is the core of Vicki Robin’s guidance to channel our life energy towards financial freedom. Here is a few things you will ultimately understand and come to terms with after reading the book.

  1. You will understand what you have achieved so far in life. You will learn a practical way to calculate your net worth, debt etc
  2. See where your time, efforts and money is being spent. Get to know the value and understand what you are getting back in return for it
  3. You will be able to prepare a chart/table of your finances, income and expenses
  4. You will figure out if you are getting sufficient value for the effort and time you spend. You will understand if they are aligned towards your life goals. Figure out what happens if you no longer work and how the expenses will change without any income.
  5. You will learn to value your life and time, figure out material priorities, maximizing the value you get on your expenses and maximizing your income
  6. Learn to invest for Financial Independence
  7. Learn the importance of revenue streams and understand the basics of building them

These are just a few summary points, the book outlines these and a lot more personal finance concepts clearly and in a simple manner. This really is a seminal guide that kickstarted the sustainable living movement. It is considered by many as the book that also kickstarted the Financial Independence and Retire Early (FIRE) movement.

The wall chart – the early retirement financial snapshot

Every month I update my blog with a progress update of my finances and include a graph that has three lines covering my FIRE Progress.

The purpose of the wall chart is to be accountable and to be able to see long term progress to provide motivation. I have to say it’s been great for seeing the big picture very quickly.

For example:

  1. The gap between the value of investments line and the monthly target line is how far ahead I am of the target I set to reach Rs.5 Crores.
  2. The gap between the Value of Investments line and the Total Invested line is how much I am able to earn from my investments, a return on investment of sorts.

The knowledge that there is a definable time left until financial independence is extremely exciting and I have to admit that as I was reading the book and came to this part I was very keen to try it myself and couldn’t wait. It hasn’t disappointed.

I enjoy doing my budget and tracking my expenses so I can enter the data into my graph and see how I’ve done compared to last month.

In summary

If you haven’t read this book yet and are interested in personal finance, frugality or early retirement then you really should because it’s become the go to book particularly for financial independence. It’s been around for a while now, but is just as relevant today as it was when it was released in 1992. Not to mention, what is sold now is the fully revised edition which has updated resources and touches modern topics.

It’s full of interesting case studies and anecdotes and isn’t full of financial jargon or complicated investing advice. As always, I recommend trying to get a copy from the library or from a second hand shop before buying but if you decide you need a copy buying from Amazon using any of the links in this article will help support Little Saves blog.

0 0 votes
Rate this article


Before you go, take a copy of our detailed Finance Planner worth $39 for free

Check your inbox or spam folder to confirm your subscription.


Abhi is a 29 yr old Indian, on FIRE to retire by 40. He has been investing and learning Finance for the past 12 years. After completing Mechanical engineering, he started working in a multi-national Bank and grew to become an AVP. Currently with an IT MNC as a VP. He lives in Bangalore with his wife and their 1 year old daughter. In his free time, Abhi loves to game on the Xbox, watch movies, read and blog.

Inline Feedbacks
View all comments
Exit mobile version