Vicki Robin does an interview with Douglas Goldstein and explains the key points in her bestselling book: “Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence.”
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Transcript: Vicki Robin interviewed by Douglas Goldstein about her book on financial independence.
Douglas Goldstein: Vicki Robin is a writer, a speaker, a prolific social innovator and she is the co-author of an international bestseller called Your Money or Your Life: Transforming your Relationship with Money and Achieving Financial Independence.
In your book you talked a lot about what you referred to as life energy, why is that important for achieving financial independence?
Vicki Robin: Life energy is our term for money and basically because the money you spend represents the hours of your life that you invested in getting it so translating money which is pieces of paper, metal or your credit card or just little electronic blips, translating money which is something abstract really and really not related to you into hours of your life, something you can feel.
When you think about your life you think “Well, part of my life I’m making money but I’m also a husband or a father or a brother or a mother or son, I am also interested in puppetry, I am interested in art, I’m interested in going to museums, I want to travel the world.”
There are lots of aspects to you and the money system tends to have you define yourself by what you do for money so thinking of money as life energy you start to think about “Who am I?” You know where do I want to invest the hours of my life and so if I think about money as my life energy I think okay, how can I get the maximal amount of pressure and utility out of the money that I have so that I can liberate my time to do many things that I care about that have nothing to do with money.
Douglas Goldstein: So a lot of the times when people are spending money they are actually trading their life energy for something else which when you put in those terms it actually makes it a little bit frightening.
Vicki Robin: You could say it’s frightening or you could say it’s sobering or you could say it’s liberating, it depends on your perspective but you know you are standing there in front of the big screen TV, you’ve already got a TV it’s just not the upgraded super, duper larger than life TV and you think “Oh I want that TV” because the whole story is designed for you to want that TV and then you start to think, number one I already have a TV, number two you know given that I am trading my hours of my life from money and that I don’t know, I can’t speak in your currency but you know let’s say in United States, let’s say I’m earning $20 an hour and that’s a thousand dollar TV, that’s a lot of hours in my life I’m going to have to invest in that TV so you think “Am I going to get enough pleasure from this TV from the extra six inches of width to justify the six days at work I’m going to have to invest in order to get it.”
So once you have that translation it’s not scary, it’s liberating because you think “I already have a TV and those six inches are not worth a week or two of my life.”
So that’s the calculation that starts to happen so that it’s spending money goes from being a reward for your hard work to a representation of your hard work, it goes into being something that helps you to preserve the hours of your life for what’s important.
Douglas Goldstein: This almost sounds a little bit philosophical, yet in the book you seemed very practical and when you talk about the importance of keeping track of every cent that comes into or out of your life, you know budgeting, keeping on top of this, how did the two of them go together because frankly a lot of people say you know when you get down to the nitty-gritty like that, you kind of take the fun out of life.
Vicki Robin: Number one yes it’s philosophical, there’s a philosophical ground but it’s a very practical nine-step program that helps you actually translate this idea that my life is more than just being a working slave, I have more to myself than just this. So it helps you translate this sort of values of simplicity and frugality and personal growth into something very concrete like you know
“What piece of meat do I buy? What can do I buy?” and it can’t be a little obsessive in the beginning because you are really paying attention at the level you’ve never paid attention before. But what happens is it becomes habitual, you start to people who do this approach for six months, they track every penny, they evaluate each month, how much they are spending on each spending category.
You do this for six months and the hardest part is to begin any program of change, the hardest part is to begin. The second hardest part is to setup your systems so that you can automatically observe these changes. Within six months, people normally drop about 20% to 25% of their expenses. Very often they don’t even know what they used to spend the money on. In other words, that’s how much unconsciousness we have about our money.
Douglas Goldstein: You mentioned before there are nine steps, let’s see if we can get through one but if people want to walk away with a concrete step of where they should start, what would you say is the number one step today that people could take towards becoming financially independent?
Vicki Robin: I will go over briefly steps two, three and four because I think those are the key of the book. Step two is understanding that money is your life energy, you start to track your money not as a sort of punishment, like you know sort of a little anal punishment but as a question like “Where is my life going?” So you track the money that you are spending and tracking itself actually brings attention at the moment of spending. So if you have to write down, if you have to develop some system for seeing every time money leaves your wallet or every time money leaves your bank account you are going to make a little entry into your record system, that entry by itself will eliminate some of your spending because you are actually paying attention as an attention tool. You track your money and then at the end of each month you sort your money that you spend out into categories. It could be categories like food I eat at home, food I eat in restaurants, the coffee I get on the way to work, you could have categories, you sort out categories because the question is how am I spending my life energy? So you look in each of these categories and you see, “Oh I say the most important thing in my life is my kids but actually I spend like three years of my life buying a new car when I already had a car.” So it introduce us into the process, the unconscious process that is really, really aided and embedded by advertising in the whole culture of money, it introduces these questions that are so powerful so you just ask “Am I going to get enough pleasure to make it worth my 10, six, 50 hours, three years to buy that whatever.”
Number two is you track. Number one is getting yourself a baseline, doing a balance sheet you know but many people delay that until later. Where they start is they track their money and then they evaluate it according to their own spending categories and they ask themselves is the life energy I spent to get that you know, grab a cup of coffee every day to work which ends up being 20 hours of my life when you calculated out, with that 20 hours am I happy I spent those 20 hours of work that way, earning enough to buy a coffee? If not, then you adjust not as a punishment but as self-preservation, that’s the core.
Douglas Goldstein: Just realizing what you want to do, I think without the knowledge you have no ability even to decide whether to change things, you know they talk about dieting when people want to diet. If you simply start by writing down what you eat during the day, it makes it much easier to cut down on what you are eating just by keeping track of it.
Vicki Robin: Exactly, not only is it easier to cut down, you cut down because you don’t want somebody watching you eat that piece of chocolate and you are watching yourself now. So you start to like not do it because you’ve introduced something in your mind called “I’m watching you.”
The next step is to evaluate it in spending categories, to observe yourself, say “How do I spend money?” Keep track for a couple of months and start to sort it out because a lot of people, you know the budget book says groceries or entertainment but if you sort that out better to like food I buy and cook at home, food I buy and eat in restaurants, you can start to see how your food budget is operating. If you take your entertainment budget into my streaming videos, my time going to concerts which I say oh I would love music but actually all I do is stream videos. So you start to break it down according to categories that makes sense for your life, not categories that your financial planner tells you to do and then you start to become more acquainted with yourself because really, the other part of this is, not only does it introduce consciousness about how you are spending your money but it actually introduces the question what’s really important to me and a lot of people don’t think about that because every day we are given messages of about what was supposed to be important to us. So you say well what’s really important to me, I got a letter recently from a guy who just thanked me up one side down, the other, because his calling was to be a librarian but you know, he loves books, you know children’s librarian he love kids but he thought oh I can’t be a librarian for my life, it’s not important enough, I’m not going to make enough money but he used this approach to basically live happily within the means of a librarian and have a career his whole life that he loves. So that’s one way to use it and another way to use it is I know people who have gotten themselves out of mega debt in three years by like making this goal, like is this you know cup of coffee on the way to work, to would I rather have that or would I rather still be paying off my debt?
Douglas Goldstein: How can people learn more about your newest research, your newest books and what you are thinking these days?
Vicki Robin: At www.vickirobin.com, it’s where I aggregate everything, it’s not like a super up-to-date website but it’s great. So my more recent book is called Blessing the Hands that Feed Us and it’s about my investigation of a certain sort of life energy flow which is called food and it’s really focused on sourcing food closer to home, developing community food systems, relationships with our farmers, to having a healthier food lifestyle, so that’s Blessing the Hands that Feed Us that’s been out for a year and a half now and I’ve done a whole bunch of, I’ve done dialogue work, I’ve done a lot of different things since the publication of Your Money or your Life it’s all at www.vickirobin.com.
Footnotes and Credits:
Douglas Goldstein posted this interview on his YouTube channel: Goldstein on Gelt.
