Interview with Monique Tilford

One of the greatest things to happen to me as a result of writing this blog is being contacted by Monique Tilford co-author of the revised edition of Your Money or Your Life. It was my pleasure to communicate with her via email and the result is the following interview especially for readers of Tight Fisted Miser.

What makes Your Money or Your Life different from most personal finance books? There are three big differences. First of all, most financial advice assumes that “more is always better” – more income, more status, and more stuff. Your Money or Your Life is different because it helps you instead to answer the question, “How much is enough?” This is a radical shift away from the more-is-better attitude so prevalent in our hyper-consumer culture.
Secondly, most financial advice is based on budgeting – setting fixed targets and spending at or below those targets. While budgeting is a good way for some people to get spending under control, we find this approach to be restrictive rather than empowering. Your Money or Your Life helps you instead discover what your own spending patterns are and then helps you evaluate your unique “enough point” for each spending category – that Goldilocks experience of not too much, not too little, but just right. Our approach is awareness-based, not budget-based.
Finally, most financial advice assumes that money is the only currency for getting your needs met. Our approach helps people discover what needs are best met through purchasing something, and what are best met by maintaining what you have, bartering with others, applying creativity rather than only cash to solve problems, and how to find psychological and spiritual approaches to satisfaction instead of just buying more stuff. We are complex social beings – and yet the dominant economic model monetizes all transactions, making the wealth that comes from a robust inner life and strong family and community connections invisible.

How would following the steps in YMOYL help someone cope with the current economic downturn? Your Money or Your Life could be an enormously helpful tool in helping people weather the current economic downturn. There are many practical suggestions in the book about how to maximize earnings and minimize spending. We have observed in fact that the average reader sees their spending decline by 20-25% within the first six months. But most importantly, the book allows practitioners to gain a sense of control over money again which is desperately needed right now. For many years, a lot of Americans stopped saving, ran up enormous credit card debt, and yet still thought they were secure because the value of their homes and stocks had skyrocketed. The current economic downturn has exposed the weakness of that strategy. Your Money or Your Life helps people instead recognize the importance of saving cash and provides detailed tips on how to invest it wisely so that it is exposed to minimal risk.

What would you reply to someone who claims that the YMOYL steps won’t work for them? No program is going to work for every person. But Your Money or Your Life is a New York Times’ bestselling book which was featured twice on Oprah and to date has sold more than one million copies worldwide. Before it was a bestselling book, it was a tape course and before that a seminar. So we actually have 30 years of anecdotal evidence proving that this nine-step program works. I’d ask people to follow the steps for one month and see what happens. Most people experience a profound transformation which allows them to save more money than they ever thought possible.

If I just do some of the steps will I still be better off financially? The Your Money or Your Life program consists of nine steps that were designed to work together. They don’t need to be done in a linear fashion (i.e. first step one, then step two …) but readers will only enjoy part of the benefits of the program if they only do part of the steps.

Which step do you feel is the most important? I personally feel that step four is the most important one. The reason I like step four so much is because it lies at the heart of the transformational aspect of the nine-step program. Step four encourages practitioners to ask themselves three simple questions: 1) “Did I receive fulfillment, satisfaction and value in proportion to life energy spent?”; 2) “Is this expenditure of life energy in alignment with my values and life purpose?” and 3) “How might this expenditure change if I didn’t have to work for a living?” But it’s important to note that step four doesn’t make much sense without the context of at least steps two and three as well.

How long does it usually take someone who diligently follow the steps to achieve FI? I should say first that we use the term “FI” interchangeably for financial intelligence, financial integrity and financial independence. By financial intelligence, we mean that the nine-step program outlined in Your Money or Your Life helps people stop just throwing money at problems and instead teaches them how to be more conscious and creative with their spending. By financial integrity, we mean that practitioners quickly learn how to ensure that the money they spend reflects their values. Financial independence means that those who are diligent in applying the steps will be able to live off their interest income eventually and never again have to work for money. Some people read the book, do the math, and realize that they can become financially independent immediately. Others take longer, of course. On average, we’ve observed that those who are truly inspired are able to become financially independent within seven to ten years.

Do you feel like you had to make a lot of sacrifices to achieve FI? No, I don’t feel that I had to make any sacrifices. That’s what I love about Your Money or Your Life – the program allows you to make the changes YOU want regarding how you earn, spend and save money. There are no budgets so there is no sense of deprivation.

As I’ve said many times before YMOYL is my favorite personal finance book and I highly recommend it.  Another great resource to check out is the YMOYL website located at YourMoneyorYourLife.info.


The Final Step

The last chapter of Your Money or Your Life deals with what you do once you have reached the crossover point.  The authors suggest putting your money into three piles. Capital which is what earns you income.  Cushion which is six months of savings. And cache which is any extra money you accumulat, this can used for unexpected expenses or for a splurge.

The original edition recommended putting all your money in US Government bonds.  That strategy wouldn’t work very well today and the new edition reviews other investment options.

This is the last of my series on Your Money or Your Life. Next week I plan on posting an interview with Monique Tilford one of the co-authors of the new edition.

Valuing Life Energy- Work and Income

The seventh chapter of Your Money or Your Life deals with work and income.  Simply put if you value your life energy than you should get the most income you can in exchange for it.  Of course you still won’t do anything that isn’t in line with your values to increase your income.

With all my focus on frugality I sometimes forget to pay attention to income.  This is a mistake since income is half of the personal income equation.  I don’t have much more progress I can make on frugality but there is plenty of room for improvement when it comes to income.  That is something I will be working on this year.

In exciting (to me at least) related news I have been contacted by Monique Tilford one of the authors of the current version of Your Money or Your Life. I will be posting an interview with her sometime next month.  I am very pleased that one of the authors of my all-time favorite personal finance book read my blog and contacted me about doing an interview.  It is stuff like this that makes blogging worthwhile.

The American Dream on a Shoestring

The sixth chapter of Your Money or Your Life deals with frugality. The original version contains 101 frugality tips. I understand that the new version doesn’t have these tips but has a more general discussion on frugality.  This wasn’t an area where I really needed any help but I enjoy reading other’s frugal ideas.  And I guess a few people enjoy reading my frugal ideas or they wouldn’t be reading this blog.  Since the orginal version of this came out there are now tons of blogs and sites dealing with the topic of frugality.  If you want to read more about frugality after reading this chapter of Your Money or Your Life there is plenty of material out there to read.

Seeing Progress: The Wall Chart

The wall chart is one of my favorite parts of Your Money or Your Life. Making a wall chart is pretty simple, you just take a large piece of graph paper and chart your income and expenses on a monthly basis. Or you can do like I do and make the graph on your computer. Hopefully when you chart your income and expenses there will be a gap between your savings and expenses representing savings. If not you know you need to improve your financial situation. The wall chart helps make your financial progress, or lack thereof, tangible.

As you can see I haven’t updated my wall chart for a few months. I really need to do that so I can see the progress I’ve made the last few months. My updated chart will have closed the gap some between the expenses and income line.

How Much is Enough?

The fourth chapter of Your Money or Your Life deals with fulfillment.  It includes three questions that will assist you in clarifying what fulfills you.  The three questions are:

  1. Did I receive fulfillment, satisfaction and value in proportion to life energy spent?
  2. Is this expenditure of life energy in alignment with my values and life purpose?
  3. How might this expenditure change if I didn’t have to work for a living?

After asking yourself these three questions you will probably discover some expenditures that you would like to change or eliminate.  I still sometimes spend money on stuff that receives a “no” answer for one and/or two but doing this step helps me reduce such expenditures. The third question allows you to see that enough might be less if you didn’t have to work.

This is a brief summary of this chapter of the book be sure to read the book to get the full details.