Learn the 7 money habits you need to love your life, not theirs.Read More
There can be a lot of messy emotions like guilt and shame, tied up with money. And when there’s not enough of it to go around, it gets even harder. Former financial advisor and counselor, Erik Wecks, knows all about the struggle and he wants to help you change. Not the way you spend, but what you believe about money. So he's written How To Manage Your Money When You Don't Have Any.
What makes this book so helpful?
1. It’s for the 78% of Americans who are living paycheck-to-paycheck. The author candidly talks about his financial struggles. And he clarifies in the introduction, “So if your concerns revolve around what will happen to your child’s financial aid when you gift them a large portfolio of stocks, this book may have little to offer you. On the other hand, if your concerns revolve around how to make sure you can afford to pay the mortgage on an upside down house so your child has a roof over their head, this book is written for you.”
2. Wecks is blunt. Things happen—medical bills, car repairs, household maintenance— and you need savings to account for those things.
“If you are paying for cable and not saving for an emergency, you may value cable more than you value your ability to pay for food, clothing, and shelter for your family.”And, “Our desired values say one thing, and financial choices say another.” It’s brutal, and it may sting, but it also may but it also may be the very thing you need to hear.
3. Wecks includes a fictional case study about a dentist and the receptionist who works at the dentist’s office. It’s an excellent illustration that having a hefty paycheck doesn’t mean more financial security. Higher expenses can be a trapping of higher income.
Wecks lays out an 8-step financial roadmap that you can follow. He also teaches two strategies to secure your basic needs.
Live below your income and save for a rainy day. (He does acknowledge that some readers won’t be able to save because there is just no money left over.)
Currently, How To Manage Your Money When You Don’t Have Any is available on Kindle Unlimited so if you have a KU membership, you’ll be able to read it for free. Or purchase a physical copy of How To Manage Your Money When You Don’t Have Any here.
It’s a new year and one of your resolutions is probably financial in nature. One way to stay motivated is to read books that encourage you to stay on the path you want to follow.
Frugal Isn’t Cheap by Clare Levison is the book you want for money matters. We all know there is no magic bullet that will turn $5 into $500 or $5000. But what this book does offer is lots of practical advice.Read More
More Than Just Making It: Hope for the Heart of the Financially Frustrated
Reader Problem: You are struggling financially and there is nothing left in your budget to cut.
Author Solution: More Than Just Making It: Hope for the Heart of the Financially Frustrated
Why you should read this book: It's like a friend coming alongside you, holding your hand, and letting you know that you are not alone. Financial difficulties can happen to anyone.
More Than Just Making It is the first financial book I’ve ever read that has really addressed the idea that maybe, just maybe, your financial difficulties are not caused by a spending problem.
So many money books suggest that you need to cut back on the lattes and the designer shoes and your budget will be just fine. But for some people, it isn’t so simple.
Odom shares her personal story. She and her husband thought they must be doing something wrong with their money because there was barely enough to cover the basic necessities. Only after sitting down with a mentor from their church did they understand that they weren’t able to cover their bills, not because they were careless with their money, but because there wasn’t enough money coming in to pay for the basics in life, like food, housing, and medical treatment. They were part of the “working poor” defined by the Center for Poverty Research as “people who spend 27 weeks or more in a year in the labor force either working or looking for work but whose incomes fall below the poverty level.”
Odom also talks about applying for government aid, the shame she felt at needing help, and the lengths she went to to avoid having anyone she knew find out her secret.
There are also chapters covering how to create a budget, tips on meal prep and food shopping, sales, and thrift shopping, the church’s role in helping the poor, and changing how we think about those who need financial help. There are also suggestions as to how you might be able to increase your income.
While there is no magic bullet that will ease your financial difficulties, More Than Just Making It may provide some encouragement.
You can find out more about Erin at her site, The Humbled Homemaker.
*I received a digital review copy via NetGalley in exchange for feedback. There was no requirement to review this book for my blog.
Pound Foolish: Exposing the Dark Side of the Personal Finance Industry
By: Helaine Olen
The Personal Finance Industry spends a lot of time telling us that our financial troubles of our own making. Fortunately, they tell us, they have the answers to our difficulties.
Helaine Olen strongly disagrees. In Pound Foolish, she calls out the inconsistencies and flaws in the works of gurus like Suze Orman, Dave Ramsey, Jim Cramer, and others. One example would be The Latte Factor, popularized by David Bach. Olen shows how the math in the latte factor simply doesn’t add up. And quotes researcher Jeff Lundy, “People don’t lose money in the United States because they literally spend themselves into oblivion. Spending $2 for a latte may, over the long term, add up. But it is not the direct cause. It has to be in combination with high medical expenses or losing your job or something like that.”
Which is another point Olen discusses. Those in the industry like to tell us that if only we’d cut out the streaming services or give up our Starbucks habit, we’d be much better off financially. But more likely, anything we save by not buying coffee will be eaten up by rising medical, housing, or food costs—areas where it is near impossible to cut spending.
Olen gives a small-scale example of canceling their family subscription to a newspaper only to have those savings swallowed by the rise in their medical insurance premiums. I experienced almost the same scenario last fall. I canceled our newspaper subscription, thinking we’d save $40 a month, only to have our internet service increase by $40. That. Same. Month. We can’t win. And if your family is in the midst of a medical crisis and you don’t have health insurance, cutting out Netflix at $10/month, $120/yr isn’t going to make a dent in your medical bills.
Olen also covers financial planners who deal in annuities, stocks, day trading, and the like. I’ll admit to skipping over much of that section as it was going over my head. I can’t tell you the difference between an annuity and a mutual market fund. I hope to learn. Someday.
There are also sections about retirement, financial literacy, real estate, and more.
I think one of the most compelling sections is the wrap-up of the book. Americans have been “sold on the idea that good financial habits and a well-balanced investment portfolio could compensate for stagnant and falling salaries.” Uh, yes, indeed, I do believe that is what I’ve been led to believe. It’s only been within the last two or three years that I’ve begun to understand it’s not that simple.
“In fact, there was never a golden age of personal finance…What we considered the financially responsible Americans in the 1950s and 1960s was, in reality, a golden era of corporate and government support, ranging from pensions to the G.I. Bill, which allowed veterans to go to college and buy low-cost housing at fixed and minimal interest rates. As these supports dried up, replaced by more complicated and less effective vehicles like the 401(k), no-money-down mortgages, student loans, and high-interest credit cards, our finances dried up as well. When combined with increasing income equality, the financial result was catastrophic for more and more people.”
“The vast majority of us are not messing up deliberately. Life has a way of happening.” Divorce, death, college, unemployment, health emergencies. These things “do not announce themselves in advance, and thus, are next to impossible to plan for. Even it we could somehow see our future, there would be no way to reliably invest and save up for it.”
So what does Olen believe is the answer? Well, she doesn’t have one. But she wrote Pound Foolish in the hope that we would begin an honest conversation about what is really the cause of our financial difficulties. Spoiler: it’s not the latte.
What is your favorite financial book? Let me know in the comments as I’m always looking for more good books.
The Index Card-Why Personal Finance Doesn't Have to Be Complicated
The premise of this book is that all most people need to know about personal finance will fit on an index card. I'm all about simplicity so the idea is very appealing. Especially since financial matters can be intimidating.
According to the authors there are 10 rules, one of which is "Remember the Index Card." Most of the rules are common sense. That's not to say we follow them but it is likely that we are familiar with the ideas. Save Your Income, Pay Your Credit Cards in full, that kind of thing.
What was new to me was:
Rule 4-Never Buy or Sell Individual Stocks
Rule 5-Buy Inexpensive, Well-Diversified Index Mutual Funds & Exchange Traded Funds
Rule 6-Make Your Financial Advisor Commit to the Fiduciary Standard
I'm not a financial guru so I can't say if the 3 rules above are solid but based on the wisdom of the rules with which I am familiar, I'm reasonably confident they are good ideas. At the least, they are new terms and ideas I didn't have before. Now I can research them and increase my knowledge.
The other 6 rules are not new. But it's always good to be reminded. You know the idea that we are the average of the 5 people we spend the most time with? Well, I apply that concept to books. Frequently reading financial books helps me to stay on track with my finances.
The Index Card is not the only book we'll ever need to read about personal finance but it's a good place to start. It would be a great book for someone who is overwhelmed with the topic of financial matters, or someone who is new to the idea of money management.
What are your favorite money books? Let me know in the comments as I'm always looking to add to my TBR list.