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 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.

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.

Where Is It All Going?

The third chapter of Your Money or Your Life builds on the topics of life energy and tracking your money that were introduced in the second chapter and asks you to do three things.  It asks you to create a table of all your income and expenses organized by categories.  The categories you have are dependent on how you spend your money.  You also need to balance your monthly income and outgo totals. Also you should compute how many of hours of life energy you are spending on different categories.

I do the first step and sometimes do the second step but I think the last step is the most beneficial to those who are just starting to take control of their finances. This last step might cause you to discover that you are spending lots of life energy on categories you don’t really care about and not much life energy on categories you do care about.  This information is very useful in helping you change your spending patterns.

That is a very brief summary of this part of the book.  You really should check the book out from your local library or buy it to get the full benefit of this book.

How Much Have You Earned and What Do You Have to Show for It?

The first chapter of “Your Money or Your Life” is about making peace with your past involving money. The two exercises they suggest you do to help accomplish this is to figure how much money you have made in your life and how much you have to show for it.

The easiest way to figure out how much money you have made in your life is to look at your statement of earnings from the Social Security Administration. They should mail you a statement each year. If not you can contact them to get a statement. This statement will show your earnings by year since you started working. It won’t show any earnings that weren’t subject to social security tax but it should reflect the vast majority of earnings. Once you add up all the years of earnings from the statement plus any earnings not reflected on the statement you will have a fairly accurate total of what you have earned in your life. This total might surprise you. I have made a little less than a quarter million dollars in my life. That is actually very little considering I am 41 years old. Doing this step makes it clear that I need to earn more money.

To figure out what you have to show for all these earnings you figure your net worth. You take all your assets(bank accounts, stocks, real estate, personal property, etc.) and add them together and then you subtract your liabilities(mortgage, student loans, credit card debt,etc.) to arrive at your net worth. Hopefully this will be a positive number. My net worth is negative due to my student loans but disregarding them I would have a positive number.

Now that you have both figures you can compare them. There is a good chance that your net worth seems awfully small compared to what you have earned. You can’t change the past but you can improve from here on out. If your net worth didn’t seem very small compared to your earnings than you are ahead of the game and following the steps in the book should be a snap. Next week I will post a summary of the second chapter.