Learning: Personal Finance

Posted by ChaosDuchess on 2011/09/06 · 1 Comment 

I’ve read a lot of books and magazines about personal finance. The ones that I have enjoyed and taught me the most are: Your Money or Your Life by Joe Dominguez and Vicki Robin, The Millionaire Next Door by Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D., The Total Money Makeover by Dave Ramsey, and I Will Teach You To Be Rich by Ramit Sethi.

What I picked up from Your Money or Your Life was to take control of your money; know where the money comes from and where it goes. So I started tracking everything, from keeping receipts to writing down when I spent cash. That’s around the time I stopped using cash because I didn’t always get a receipt. The Millionaire Next Door showed me where I wanted to be and helped to change my mindset.

The Total Money Makeover taught me to save $1,000 for an emergency fund and then use the snowball effect to tackle my debt. Money and debt are psychological and emotional. I was more motivated to stick with throwing money at my lowest balance when I could see the balance dropping than if I was trying to lower the interest I paid over time. My highest interest rate was also my highest balance. Everything else would be paid off with minimum payments before that one was done. Visual results are much more motivating.

I have to admit, I came across I Will Teach You To Be Rich through the Get Rich Slowly blog. There are some great advice and articles to be found. I Will Teach You To Be Rich has great information on setting up your account for automation – set it and forget it. It also had great advice on investing. This is the book I wish I had when I was in college. I’ll use it to rearrange my finances but, mostly, I’ll use it for my son’s accounts. When he started working in 2010, I set up a spreadsheet to get him started tracking his money flow and to start planning his spending. He doesn’t get a 401(k) at his job, but he can certainly do the other steps. Plus, I had started an investment account for him several years ago, so I can use that to teach him about investing. Best of all, he has no debt. What a great way to start!

Filed under Books, Finance, Reading