I’ve mentioned time and time again on The Simple Dollar that there is one personal finance book that, in my eyes, stands out above all the others. It certainly changed my perspective on money – I read it just as I was becoming aware that I needed to turn my financial life around and it was truly a life-changing read for me. I wound up writing a ton of commentary and supplementary material about the book, simply because it was so profound to me.
That book is Your Money or Your Life by Joe Dominguez and Vicki Robin.
At the time I read it, it had been in print without significant revision for more than a decade. One of the authors, Joe Dominguez, had passed away in 1997, and in order to maintain his vision, the book simply stayed in print without significant change for many years.
By the time I read the book in 2006, many of the numbers in the book were quite outdated, as were some of the cultural references and specific frugality tips. This didn’t really bother me too much – the value of the book doesn’t come from those things.
This brings us to today. Very recently, the “other” author of Your Money or Your Life, Vicki Robin, issued an updated version of the book, adding an additional author (Monique Tilford) and promising to be “revised and updated for the 21st century.”
Many Simple Dollar readers wrote to me and asked if the new version was significantly different than the old. Does the new one offer some additional insights? Did the new version change the meat of the message?
For the most part, the new version of Your Money or Your Life is unchanged from the previous versions. There are quite a few updated statistics throughout and some of the cultural allusions have been modernized or changed.
However, there are two big exceptions to that rule – one good change and one bad change (in my opinion).
The good change is the revision of the final chapter, which discusses investing. In the old version, Dominguez and Robin prescribed an extremely conservative plan for investing, telling readers to stick to bonds and little else. From my perspective, this advice was the weakest part of the original book. Such an undiversified investment strategy is in itself risky – it’s the equivalent of putting all your eggs in one basket.
This time around, the investment advice still leans towards the conservative, but it actually provides a more well-rounded view of investing, including several pages discussing index funds. The general message is that you should balance your investments, but move primarily into more conservative investments as you approach retirement.
The bad change, though, comes in chapter six, which focuses on tactics for cutting your spending. In the earlier version of the book, this chapter featured a list of 101 specific frugality tips, most of which still worked quite well (though a few were dated). I fully expected that this list would merely be refreshed for the new edition.
Instead, though, this list of tips was entirely cut from the new edition. Replacing it is a twelve page discussion of different areas of frugality. While this discussion is worthwhile, it doesn’t work nearly as well as the specific tips of the earlier version. The specific tips were urgent – given the material that had come before in the book, you were ready to jump up off the couch and get started on this stuff, and those tips were the perfect starter material. The newer material doesn’t have that urgency – it’s a solid discussion of frugality, but it doesn’t make you want to jump up and get started right away.
Don’t get me wrong – the revised version of Your Money or Your Life is at least as good as the older version. The minor revisions (that basically eliminate the “dated” feeling) and the rewritten chapter on investing easily outweigh the unfortunate changes to the frugal living chapter, and the underlying message is still as powerful as it ever has been.
There is still no personal finance book I would recommend before Your Money or Your Life. It’s the best one I’ve read.
Still, I know from my own experience that I was really inspired to try out frugality by the tips given in the sixth chapter – it was really the single thing that got me interested in frugality. I can’t help but wonder if the new version would have inspired me in the same way.