Vicki Robin

Introduction to the Revised Edition

Today, big national and global changes are making it very hard to get control of money in your personal and family life – and to plan for a secure future. You don’t need me to tell you that – you experience it daily. That’s one reason we decided to update this classic book. Now more than ever, we need a new way of thinking about earning, spending, saving and the good life. When this book came out in 1992, we were at the beginning of the dot com bubble and shortly thereafter, the real estate bubble. Bubbly was flowing. We bought into buying more based on our newfound apparent wealth from this boom. But times have changed and many things are going bust – and many people along with it.

Before I touch on current challenges – and how Your Money or Your Life can help – I want to acknowledge that most generations have thought that the world is going to hell-in-a-hand-basket for one reason or another. Our current hand-basket, though, portends a fundamental, not just cyclical, shift in how we live. So many crises are synergizing into a perfect storm: savings are shriveling, debt is increasing, pensions are drying up, incomes are stagnating, jobs are going global, and social and health safety nets are unraveling. All this amidst a rapidly changing climate, crucial wells –like oil and water – beginning to run dry, populations starting to outstrip food supplies, and the global economy itself showing multiple signs of instability. If you’re nervous, you have every right to be.

According to the Christian Science Monitor, “Growing numbers of economists believe that America is now in a transformational economy, where consumer spending may play a lesser role, as households belatedly recognize the need to “right size” their lifestyles.

Global shifts like these and more are trickling down to our everyday lives. We might not understand monetary policy, but we do understand our paychecks not increasing as fast as our expenses. We might not understand the science of global warming or the calculations of “energy return on energy investment” (an oil extraction and production discussion) but we do understand hotter, wetter summers and rising prices at the gas pump.

For all these reasons and more, the timeless common sense in Your Money or Your Life is actually timelier than ever. And it’s not too late. While the early adopters who did this program in the 1980s and 1990s are now more insulated than most from global instabilities, it’s never too late to shift to a more frugal way of life. Frugality, one friend said, is the new black – it’s more in vogue than ever because it’s so necessary.

So let’s go through some of challenges we’re facing – and see how transforming our personal relationship with money can shore up our personal levees and help us weather this gathering storm.


At the time of this writing, the savings rate in the United States has been below zero for three years – the lowest it’s been since the Great Depression. In the richest country in the world, we can’t save a dime. While we each bear responsibility for keeping our wallets zipped, temptation to overspend is everywhere. When Joe Dominguez and I wrote Your Money or Your Life, there were only TV, radio, billboards, direct mail and print ads to drive us to destruction … of our best intentions to save. Today, the Internet swamps us with advertising with every click – pop up ads, flash ads and banner ads greet us on each page. Even billboards have gone digital with flashing lights and eye-catching movement. Plus, ads are now on the seats of shopping carts, on floors of supermarkets and pouring into our email inboxes. In 2006, spending on advertising was estimated at $155 billion in the United States and $385 billion worldwide, and the latter to exceed $500 billion by 2010

Saving money in the era of credit cards has come to seem quaint at best, a sucker’s game at worst. We are taught that debt = freedom but that’s the kind of doublespeak in George Orwell’s dystopic novel, 1984 where they claimed that “hate is love” and “war is peace.”

Okay, let’s fix this mental glitch. Repeat after me. To have savings is to be free. Savings means freedom from debt. Money in the bank means the freedom to leave your job if the boss is intolerable or the benefits have just been yanked. And if you lose your job, having savings is the freedom to keep your house and car because you can cover your payments – if you have any to make in the first place. Having savings means you can start a business or buy land, even if the bank won’t lend to you because, ironically, your habit of savings means you don’t have a debt trail or a credit record.

People who follow the program in Your Money or Your Life, on average, lower their expenses by 25% within six months and almost to the person they say their quality of life has gone up. When folks really catch fire with the program, they often save 50% or more of every paycheck, shedding debt the way people with intractable weight problems – once they are committed – shed pounds.


Speaking of debt, well, where do we start? A savings rate below 0 is a nice way of saying in hock, in the suds, on the rocks – that is, in debt. Did you know that credit card debt of the average U.S. consumer is over $3000 and of the average household over $8000? That’s not even counting the over $5000 of mortgage and auto debt the average American carries. Encouraged at every turn to consume, we have spent every penny and taken advantage of debt limits on multiple cards, and, during the market and housing bubbles, used home equity loans and sub-prime mortgages to keep creditors at bay. We’ve wrung out every resource for its debt potential – and we’ve pretty much reached the end of that game. More Americans now declare bankruptcy than graduate from college . But it gets worse. According to the U.S. National Debt Clock the public debt as of Aug 27, 2008 was $9,624,855,389,454, increasing at over $1.85 billion a day for the last year. This translates to over $31,500 for every U.S. citizen. Whose debt is that? Ours. (And how are we going to cover that?)


Geoff Colvin commented in Fortune magazine recently “We made it through the bursting of the Internet bubble and now the bursting of the real estate bubble. Next we may be approaching the end of the most worrisome bubble of all: the standard-of-living bubble.

While the doublespeak consumer culture told us to leverage debt and accumulate property so we can sell it later for more, those of us who took to heart the clear-eyed perspective of Your Money or Your Life, did not buy in, no matter how many hip, cool guys told us we were nuts not to get on the gravy train. We lived below our means and found that there were multiple benefits from rejecting the hyper-consumer culture, including less stress, more time, and greater happiness. And, oh yes, getting out of debt! Sometimes 6 digit debt. Often faster than seemed possible.


The poorest 80% of the people in the United States have seen very little rise in income since the 1970s. The wealth gap, though, has skyrocketed. In this century, in fact, we’ve seen the biggest increase in the wealth gap since the 1920s. Today, the average CEO in the U.S. makes more in a day than the average worker makes in year. This isn’t said to fuel envy of the wealthy and demand a piece of the pile for the poor. Rather, it’s to point out that while absolute poverty deprives our bodies of necessities, relative poverty – being so much poorer than people no smarter or more willing to work than we are – makes us dissatisfied with our lot in life no matter how much we have. It corrodes society and the psyche – saps our belief in justice and fairness and hope. It makes us poor amidst plenty. We feel left out, lonely and are more likely to give up on the dream that we can have a better life than our parents.

While many work for more economic fairness, Your Money or Your Life helps us get out of this competitive game and helps us look more pragmatically at what would actually make our lives better. We shift from comparing ourselves to others to considering our real needs and desires. We shift from “more” to “enough” and ultimately get more of what money can’t buy. Priceless.


When a job is the only way to get money, health care insurance, and respect, having a job is crucial. Yet for U.S. workers, good jobs are harder than ever to find. Manufacturing, tech and even service jobs have migrated to lower-wage countries, and even advanced degrees no longer assure a secure position. Your Money or Your Life challenges this dependency on the economy to give us the jobs we must have to survive. This book teaches a different perspective on employment, one that opens up far wider possibilities for income, security and providing for your needs. Your job becomes an important part of your life, but no longer the centerpiece and biggest robber of your time – making room for family, friends, fun and, oh yes, sleep.

Cost of Living

Not everyone has the same cost of living, of course, but some basics are getting more expensive across the board. In the U.S., health care (which I like to call sickness care because really, the system does nothing to keep us healthy) costs have, by every measure, outpaced inflation and other budget items. For example, the average employee contribution to company-provided health insurance has increased more than 143 percent since 2000. During that same time period, employment-based health insurance premiums have increased 100 percent, compared to cumulative inflation of 24 percent and cumulative wage growth of 21 percent during the same period. Food costs are also soaring, thanks to the impact of rising fuel costs which impact every aspect of food production: tilling, planting, fertilizing, harvesting and sending product to market.

While we wait and mostly watch the political process try to handle these big dents in American’s budgets – and expectations – what can we, the little people, do? Readers of Your Money or Your Life have already gone forward to the new normal of living better on less, which includes smart shopping for food and health care and clothing and cars and housing and … well, everything. They use all the advice in Chapter 6 and – better yet – make up their own. Far from scrimping and saving or making do, “FIers” (people who’ve gained financial intelligence, integrity and independence through these steps) thrive knowing that they have the skills and smarts necessary to overcome almost all price increases.


If your eyes glaze over when you think about monetary policy and the Federal Reserve, don’t worry. Mine do too. But there are two pieces of information from this back room of the dismal science of economics that people who’ve transformed their relationship with money via Your Money or Your Life are better able to face.

First, the U.S. Treasury doesn’t just print money and put it into circulation. Banks make loans with money they mostly don’t have – can you imagine – and that’s what creates new money! Banks are only required to have in the vault a fraction of the cash they lend. The rest is backed by nothing more than the assumption that the economy will keep expanding, allowing people will pay back their loans with interest.

Second, the U.S. Treasury has nothing in its vault backing your money. Since Nixon took our currency off the Gold Standard in 1971 there’s been no gold or any other collateral you can convert your money into. It is “fiat currency” – fiat as in faith. It is held up just by the faith we all have in it being worth something.

Because of this, depending solely on the money economy to meet your needs is actually risky business. If we think that money equals wealth or security or success, we are at the mercy of these economic and monetary forces. We are, as one sage said, laying up our treasures where moth and rust corrupts. But those who apply the nine-step program in Your Money or Your Life know otherwise. They know they need enough money to get things they rely on the money economy to produce (think cars and appliances) – but beyond that they have other currencies: neighborly sharing, do-it-yourself skills, and the creative capacity to solve problems with what’s at hand. One promise of this book is “financial independence,” but that’s not just rolling in dough. It’s unhooking your thinking from the consumer culture and from assuming you must buy your way through life.


Despite all our jitters, Social Security in some form will probably persist, though the age limit may keep going up. Since Boomers (myself included) claim that 60 is the new 40, that’s probably appropriate, though 82 as the new 62 seems a bit late for benefits to start. But what about pensions?

Corporations are now shifting from “defined benefit” (guaranteed monthly payments based on salary and years of service paid by the corporation for the rest of your life) to “defined contribution” (an amount of your salary you can put into your retirement account). Risk is transferred from corporation to worker in that switcheroo of one little word. From 1978 to today, the number of defined-benefit plans plummeted from 128,041 (covering some 41 percent of private-sector workers) to 26,000. According to the U.S. Bureau of Labor Statistics, only 21 percent of workers in the private sector have defined-benefit pensions . As a result, there is grave concern in this country about the ability of seniors to financially afford the prolonged lifespan afforded us by medical advances.

The program in Your Money or Your Life cannot be more important in these times when assumptions about the golden years are shifting significantly. While it’s not a saving plan per se, it engenders many positive changes that lead people out of debt and into rapid savings. As the title of Joe Dominguez’s original seminar (Transforming Your Relationship with Money and Achieving Financial Independence) suggests, there are two outcomes from doing this program: transformation and independence.

Everyone who reads and heeds this book will indeed transform her relationship with money, have more of what he really wants, shift from debt to savings, and feel financially empowered. Those who stick with the program over time with focus and intention can arrive at financial independence well before Social Security cuts in or their company turns them out to pasture. They will have defined how much is enough for them and tested that “enough” point over a decade or more. No financial planner formulas for them – they KNOW what they need and know that it’s probably far less than the standard assumptions. They will have become knowledgeable and sophisticated about investment instruments that can provide sufficient income over time to assure that their basics are covered. Having enough for life might be a combination of Social Security, bonds, mutual funds, frugality tricks, side jobs that trickle in some extra bucks and the kind of alert awareness you develop by doing the program itself. This book shows you how to have all of that.

The environment

When we wrote Your Money or Your Life in 1991, the environment was still a niche issue – nice but not necessary to care about. The Earth Summit in 1992 gave us a detailed road map for the path to a sustainable future… which we largely ignored. Al Gore, who’d been sounding the alarm about climate change for decades, was elected Vice President of the United States… and then sidelined. Clinton formed the President’s Council on Sustainable Development (I personally served on the Council’s Population and Consumption Task Force) to reckon with our situation… and our reports gathered dust. Change was moving at a glacial pace (which back then meant “very slow” but now isn’t such a good metaphor).

Today, however, we are beginning to understand what economist Herman Daly has been telling us for decades: the environment is not just an external resource for an ever-expanding economy but rather vice versa – the economy is a human invention that operates within the limited capacity of the biosphere to provide the basic services of life. “In the beginning, the economy tapped into the environment. Now it is draining it dry.” Ecological Footprint analysis — which measures human impact on the environment — informs us that for the past two decades we have been using more of the Earth’s resources annually than can be replenished.

In terms of the program in Your Money or Your Life that means that we need now to factor these limits into our personal financial equations. Shrinking resources may mean shrinking opportunities to make a buck by making, selling or trading stuff. Conservation is key now, both in energy use and in “life energy” (money) use. The program teaches you how to do that not as dour necessity, but rather as an interesting opportunity.

Is there any good news?

Yes. The program in this book for starters. Developed by Joe Dominguez for his own early retirement in 1969 at the age of 31, it has now been used by millions of people globally. Joe worked on Wall Street, not as a broker but as a financial analyst who wrote a weekly trend-watching bulletin for his firm’s institutional investors. All the while, he knew that his goal was to do his service to the money economy in the way young men do military service – with integrity yet for a finite period of time. He always knew there was more to life than “9-to-5-til-65.” Joe’s genius was being able to see reality more clearly than most and make dispassionate, wise choices based on a long and deep view. He died in 1997, but we are lucky that he left us with such a well-honed, pragmatic program.

Also, once you get your eyes off the consumer culture screen and your nose out of the more-money-more-money-feedbag, good news is everywhere. People who’ve simplified their lives, according to a 2005 study by Tim Kasser and Kirk Warren Brown, are happier than mainstreamers. They are less materialistic, less status conscious, more interested in personal growth, friends, family, and participating in the life of their community. Happiness studies confirm again and again that these are the elements of a fulfilling existence.

Followers of the program also long ago turned their attention to what the mainstream culture is just discovering: local and sustainable energy production, local and organic food, energy-efficient cars and houses, travel closer to home and vacations in nature, and caring for what they have (possessions and bodies), rather than depending solely on modern medicine and technology to save us.

Most importantly, they are reweaving the web of community, depending on each other rather than going it alone. They are discovering that this neighborliness isn’t only practical, it can end the epidemic of loneliness. An old teaching tale goes like this:

Young men wanted to know the difference between Heaven and Hell. The sage led him to two rooms with observation portals, one labeled Heaven and one Hell. Looking in at Hell he saw a banquet table filled with luscious food but the people at the table were emaciated and distressed. Their spoons had long handles to reach the food, but the handles were too long to bring the food to their mouths. Then he looked in on Heaven. Same table full of luscious food. Same long spoons. But the people were healthy and happy and using their long handled spoons to feed one another.

Sustainable living, far from being deprivation, is the beginning of a renaissance of universal well being. Your Money or Your Life is one of this generation’s portals to that good life.

copyright Vicki Robin 2008

  1. Hi Vicki and friends! You guys are fabulous. I noticed a typo in the intro on this site, and hope it isn’t in the actual book’s intro. It reads:
    “From 1978 to today, the number of defined-benefit plans plummeted from 128 (covering some 41 percent of private-sector workers) to 26,000. According to the U.S. Bureau of Labor Statistics, only 21 percent of workers in the private sector have defined-benefit pensions.” Did you mean 128,000 rather than 128?

  2. You are the best!!!
    And this shows you actually read it. Thank you.

  3. Hi there John —

    I wanted to confirm for you that we did (thankfully!) catch that typo before it went to press. The sentence in the book correctly reads: “From 1978 to today, the number of defined-benefit plans plummeted from 128,041 (covering some 41 percent of private-sector workers) to 26,000.” Sorry for the confusion.

  4. Hi. I am preparing to begin the money course with several friends of mine, however, I am having difficulty locating the audio workbook for the course and the group workbook for the for the steps after the course(we want to use the spiritual one). Could someone possibly point me in the right direction?

    Thanks in advance

  5. Hi Shaheed —

    The best source for the audio workbook (otherwise known as the tape course) and the Christian or general spiritual study guides are Please let me know where your study group is located if you’re open to having others join your group. Thanks!

  6. Greetings! I heard Vicki on NPR this morning and was intrigued with how she framed and reframed our relationship (s) with money. Thanks for posting the forward here, it’s witty, intelligent, and inspiring. Regards. TM

  7. Is there anybody in Spain in connection with this movement?
    I live in Madrid and I’d be very keen on contact any person/organisation to participate in a workshop.
    Thanks in advance.

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