Your Money or Your Life, Track Income and Expenses Monthly, Then Work on Lowering Expenses and Increasing Income

Today we're going to cover steps #5 through #7 from Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century.

In the past we've covered one step at a time, but to be honest I don't see enough "meat" in the next three steps to warrant a post on any one of them alone.

Last time in this series we evaluated our spending, looking at each spending category and determining whether or not the amount spent on that item was worth it for us or not. Today's steps follow along this line of thinking and evaluation as well.

Here's step #5:

Make and keep up-to-date a chart of your total monthly income and your total monthly expenses.

The book has you create a hand-written chart with dollars on the vertical axis and time (broken into months) on the horizontal axis. Then for each month you make a mark for your actual income and your actual expenses. You then draw lines between the marks for each so they form a line -- and you can see your gap (the difference between your income and expenses) each month.

I used to keep my finances by hand (in a ledger book) back in the "olden days." Then I got Quicken and have never looked back. I could create the chart they are talking about above in roughly 15 seconds (and include the past 15 years or so) using my computer and that software. Very easy.

From this information, they want you to then start concentrating on expenses -- and how you can cut them. There isn't anything about increasing income at this point (that's coming), it's all about eliminating costly things that you get no pleasure from. This spirit is evident in step #6 which is as follows:

Lower your total monthly expenses by valuing your life energy and increasing your consciousness in spending. Learn to choose quality of life over standard of living.

I'm all for cutting needless expenses (as regular readers are aware) and for spending on quality of life rather than standard of living. But was there really a need to go through all of this "life energy" stuff and 195 pages to get us to the point where we simply are concentrating on "cutting expenses"? Seems like a bit of overkill to me.

Anyway, the book continues with step #7 as follows:

Increase your income by valuing the life energy you invest in your job, exchanging it for the highest pay consistent with your health and integrity.

I'm going to say it now: I hate all this "life energy" mumbo jumbo. It's too touchy-feely for me. Why can't they simply say something like "time is money, so work to make more money in less time." I know, those aren't the right words, but you get the idea. All this "life energy" stuff makes me think this is a long lost book from the Starship Enterprise.

And at the end of step #7, we're now at page 233. Yes, 233 pages to say:

• Create a budget


• Evaluate what you can cut based on what you don't like/need


• Work to grow your income

Didn't I just recently say all of this in one post? I think I did.

And if you're looking for a short-list of ideas you can use to grow your income, check out 80-20 Your Career. These are the career-related tips that will give you the most results for your time and effort.

It's not going to be a surprise to those of you who are reading along, but I don't really care for this book. I Know that so many people have LOVED it, but it's too "out there" for me. Perhaps if I had read it when I knew less about managing money, then I would have liked it. Perhaps. But I don't think so.

So far, I haven't learned much from this book and it's been (almost) a waste of my time reading it. But there's a concept coming up in the next step that I do like (yes, I read ahead a bit), so stay tuned to see what that is...

Update: Click here to read the next post in this series.

Comments

[Eric]

I skimmed through the book too but wasn't enamored like a lot of folks. I think it's great that the book helped so many but personally I think there's a bit too much hype here.

[AZJoe]

Your Money or Your Life was the first book I read when I was starting to come to grips with my financial management - or lack thereof. I found it had many concepts I had never imagined, let alone lived. For me it was life changing. I admit to not having perfectly followed all the steps in the book, but I did most of them and found them helpful for a beginner (even if I was almost 50 when I first read it). I frequently encourage people who are thinking about retirement and are not sure how to accomplish it to read the book and use the good parts. I did find the first 50 or so pages of financial theory very deep going. Be that as it may, by good fortune and good advice, in part from YMOYL, I retired at 56.