Apr 302010

Your Money or Your Life is a book that’s had a profound impact on many people. The book is all about how you decide to use your life energy; that money is, in fact, life energy. The book asks the question: “What are you trading your life energy for?”

While Greece, Portugal, Spain, the UK and the US of A are all buried in debt, individuals in this country are in no better shape. Personal debt is in line with national debt after a spending spree financed primarily by using one’s home as a bank. Now, the question will be how to pay it back. Or, if we can’t, what are the implications of default?

Governments can print money. Individuals cannot. So the Keynesian theory of spending yourself out of trouble doesn’t work for individuals. Frugality is the only real solution. Your Money or Your Life takes you through the steps, shows you how to analyze how you spend your life energy and shows you how to change.

This a potentially life changing book, one that makes a great gift for someone who seems to always be on the financial edge or who hates their job. It’s worth a detailed read. One way to sample it is through the blog discussion of a young fellow named Trent Hamm who discusses the book section by section as it relates to his own life and attempt to get his financial house in order.

I can relate to Trent from my days as a 30 mile (one way) a day commuter for nine years in my first real civilian job. I realized that commuting was a real cost of life energy and, finally, the commute motivated me to find something else. A few years later I was able to walk to work. Tim Hamm is also a commuter and puts a pencil to the cost coming to the realization that his commute plus the other costs of doing business (clothes, lunches, parking, etc.) reduce his true hourly wage considerably.

The point of this discussion is that frugality is a skill worth learning when your country is so far in debt there is no chance that the debts will ever be repaid, when the outgo of Social Security is less than the inflow, where there will soon be only two workers for every retiree and where there is active discussion about government taking over IRAs and 401K’s.  We have lived to see a day when the Loonie is at par with the dollar.

What if the Social Security check or state retirement payment quits arriving, or the Government turns your IRA into some kind of annuity (and we don’t even know what that would mean), or your bank goes broke and municipalities can’t pay their bond interest? Forced to scale back and power down is harder if you haven’t had some practice.

But your Money or Your Life is really a book for young people, not pensioners. This blogger feels strongly that it’s the most important book he has ever read:

“The old way of saving was to save to escape work. The Your Money or Your Life way to save was to free yourself to do the work you love. Your Money or Your Life turns the conventional saving rules on their head. When you are saving to escape work, you are saving for the years when your life is drawing to an end. When you are saving to free yourself to do the work you love, you are saving for the years when you still have plenty of steam in your engine. The Your Money or Your Life vision of saving is in an important way the opposite of the conventional saving vision.”

The idea of “Transition” incorporates self-reliance and personal resiliency along with the same ideas for community. Lots of people are unemployed or furloughed or find that business is currently very slow. Recovery may be years away. Your Money or Your Life can provide some necessary tools to make it through and prosper on a variety of levels.


  2 Responses to “Your Money or Your Life”

  1. Great post. For me the original thinker on frugality is Thoreau. All you need is the first chapters of “Walden” especially the one on “Economy.” Thoreau is especially concerned about the poor Irish immigrants who are laying the rail tracks from Concord to Boston. His comments are mostly directed at
    people who have no common sense about how to live a dignified life within one’s means. His best thought: “The true cost of a thing is the part of yourself you are willing to exchange for it.” He asserts that the individual should be prepared to walk out the city gates at any moment with what he can carry on his back. Thoreau — it should be noted — never had a wife and children.

  2. I agree, Dave, Thoreau had figured out a lot about “true costs”. I love his story about how he found some rocks that he thought were beautiful and brought them back to put on his desk at his home by Walden Pond. He threw them out the window in disgust when he realized they would take regular dusting. He wasn’t willing to make that long-term time expenditure. Heh, I could do some tossing through the window, too, these days, but then my yard would be a mess!

    Thoreau did have family members that he lived with and helped support during much of his life by working in the family pencil factory. I doubt they would have walked out the “city gates” with him, though, unless under duress.

    As Thoreau also said, “Simplicity, simplicity, simplicity!”

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