海角大神

Every Sunday, The Simple Dollar reviews a personal finance book or other book of interest.

I鈥檒l admit it 鈥� I鈥檝e only seen the show Your $$$$$ on CNN once. I don鈥檛 watch much cable news 鈥� or broadcast television at all 鈥� so I don鈥檛 have much opportunity to follow programs like that one.

Instead, I came across this book at the library, not knowing the author, Christine Romans, from anything. I checked it out for one reason: it manages to ride the fine line between intelligent personal finance writing and easy-to-read personal finance writing.

It is a fine line, because it鈥檚 easy, when you know about finance, to write about it in such a way that鈥檚 not easily accessible to the layperson who just wants to make ends meet. At the same time, you can also write about it in such a way that you鈥檙e not really saying something of interest to anyone.

It鈥檚 a fine line that I try constantly to achieve, and I enjoy it when I find a book that manages to do it. seems to do that quite well.

1 | Reset, Repair, Recover
Money can鈥檛 buy you happiness, but like it or not, it is the engine upon which most material transactions occur. The smarter you get about these transactions, the more likely it is that you鈥檒l be able to have the resources for the things you want in life. The best way to get started is to have a heart-to-heart with your spouse and with yourself. Ask yourself if your money is actually lasting through the month and whether your account balances are actually improving each month (on average). Are you living in housing that鈥檚 too expensive (more than a third of your income)? Romans offers up a bevy of such questions.

2 | Spending Your $$$$$
The real lesson of this chapter, I think, is that honesty with one鈥檚 self is vital. If you can鈥檛 honestly answer the question of whether or not you can actually afford to buy a particular item, it鈥檚 going to be very difficult for you to spend less money. Simply put, if you don鈥檛 need it, don鈥檛 buy it, and if you can鈥檛 afford it, put it down. Another key point is the value of saving first rather than last 鈥� the first thing you should do with your paycheck is to put some of it in a savings account that you can鈥檛 easily touch. I prefer using a completely separate bank for it.

3 | Your Job
I have one minor problem with this book and it begins to crop up here: politics. Romans often tries to slip in political perspectives throughout the book, never really offering enough to give a coherent political perspective, but just enough to taint the waters. Here, the book discusses the job market, pointing out the key fact that if you鈥檙e out of work, you need to work hard on retaining your skills and connections. On the flip side, if you鈥檙e still employed, future success hinges greatly on results.

4 | Debt
Here, Romans introduces the usual 鈥済ood debt versus bad debt鈥� dichotomy in which some debt is identified as being 鈥済ood鈥� (mortgages, student loans) and others are 鈥渂ad鈥� (particularly credit card debt). I tend to think that even 鈥済ood鈥� debt isn鈥檛 all that good and one of my current financial goals is to move as close to debt freedom as possible, simply because of the oppressive nature of debt paymetns constantly draining away your income.

5 | Credit Cards
Clearly, credit cards fall into the 鈥渂ad鈥� part of that 鈥済ood versus bad鈥� dichotomy. It鈥檚 key to remember that most Americans pay their credit card bills on time, but some people are unable to cope. Those who cannot need to take radical action to move into a situation where the credit card debts are under control. Another key factor related to credit cards is to make sure that your personal credit is under control 鈥� Romans points readers to the for getting your credit report from the federal government.

6 | Home Sweet Home
The key thing to remember is that you begin to make money the day you buy your home. You鈥檙e now able to have a better commute. You鈥檙e more able to cook meals at home and to entertain at home. Don鈥檛 focus on 鈥渢urning鈥� a big profit on your home because, frankly, it鈥檚 not realistic. The idea that you can turn a huge profit on your home comes from the housing bubble, which was a period of unreality that we鈥檙e still reeling from.

7 | Save, Invest, Retire
Romans identifies three steps to a prosperous future: budgeting, saving, and investing. As you become more prosperous, your focus moves from the first to the second, then from the second to the third (I think we鈥檙e undergoing that second transition right now). Romans argues that no matter wherever you are along that spectrum, you should strive to spend only 70% of your income, striving to save or invest 20% of your income and then giving the remainder to charity.

8 | Family Money
Honesty, honesty, honesty. That underlines this entire chapter. If you鈥檙e deceptive about your money with yourself, you鈥檙e going to wind up in financial trouble. If you鈥檙e deceptive with your spouse, you鈥檙e endangering that person鈥檚 financial future and doing what you can to make sure they don鈥檛 trust you when this duplicity is discovered. Honesty makes it all better 鈥� if you make a spending mistake, admit it.

9 | Health Care
Here, the politics come out a bit again with some discussion of the upcoming health care changes in the United States 鈥� something I鈥檝e been hesitant to talk about because I鈥檓 pretty confident that what we actually have in 2016 or so won鈥檛 look like what we think it鈥檒l look like right now, so why speculate? Still, I do agree with Romans that changes in some regard are coming, and I also agree with her that health care expenses are a huge problem. The best thing you can do is stay active and focused on your own health 鈥� eat well, get exercise, and do what you can to stay healthy.

10 | Small Business
A good small business rests on a good business plan, good relationships with the community, and startup funds that aren鈥檛 personally strangling you or strangling the business. If you have those elements in place, you鈥檙e much more likely to succeed than if those elements do not exist.

11 | Government
Quite frankly, I didn鈥檛 like this final chapter. It provided a healthy dollop of politics in a book that didn鈥檛 really need them, and that鈥檚 my biggest criticism of the book. Although I enjoyed pieces that showed how government and personal finance are connected, I didn鈥檛 like when the book kept going and moved into the stuff of political debates, which are endless and divisive. You鈥檙e not going to convince a conservative to be a liberal and you鈥檙e not going to convince a liberal to be a conservative. Rather than demonizing each other, let鈥檚 seek out some common ground and focus on making that common ground an absolute home run instead of arguing about minor social issues while trillions of taxpayer dollars vanish down a rathole.

Is Worth Reading?
If you can get past the politics, is a very solid, well-written, entertaining, and thoughtful general personal finance book. It ties specific personal finance issues to some general societal concerns quite well.

I just wish the author had chosen to keep the more politically-edged elements out of the book. While some will enjoy them, I just felt that it was out of place and is likely to distract some from the good personal finance message in the book.

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