I just finished reading All Your Worth by Elizabeth Warren and her daughter Amelia Warren Tyagi. I actually liked it quite a bit and agree with everything except their feelings towards car payments. (They don’t hate them, I do.) The book is nicely laid out and easy to read. And despite being printed in 2006 (and I’m assuming written during 2005) it gives solid advice on buying real estate. The only reason I looked to see when the book was printed was because in the real estate section they didn’t talk about the crash but instead talked about how heated the market was. But never the less, they advised 20% down and a fixed rate mortgage. Go them! I think that speaks volumes about the solid advice you will find in this book.
They break down your monthly budget into what they call a “balanced budget” which is 50% for “Must Haves”, 30% for “Wants”, and 20% for “tomorrow”. Tomorrow is savings but it can also go towards debt reduction because paying off debt is making your future better. Which I agree with whole-heartedly.
They explain pretty clearly what is considered a “must have” and what is considered a “want”. They also explain that if your budget is currently out of balance to try to get it into balance over time, that it’s not something that can necessarily be fixed over night. It will take time to make changes to your budget and that you should be trending towards a balanced budget. Don’t get discouraged because you can’t fix it in 30 days, just keep working towards it.
They also put a lot of emphasis on having “fun money”. They are not in the camp of putting every single dollar towards debt and having no money at all for free spending. I agree with this.
They also have a whole chapter on relationships and money. How to deal with disagreements when it comes to money and some techniques to overcome those issues. They also had a great section on the debate on whether or not to combine finances when you get married. I agree with everything they said in this area, which was basically “it’s combined whether you do your accounting that way or not”. If you save for retirement and your spouse doesn’t what’s going to happen when you retire? Are you going to kick our spouse out of the house because they can’t afford to stay? Hopefully not! If one spouse racks up tons of credit card debt and gets in over their head they can’t file bankruptcy alone. The savings of the other spouse is going to be taken into consideration. If you are married, your finances aren’t separate. They just aren’t.
Overall I liked this book a lot. I kept comparing it to Dave Ramsey’s Total Money Makeover. It takes you through the same basic steps, $1,000 emergency fund, debt snowball, fully funded emergency fund, retirement, paying off the house, and then investing. But there is less motivational/ emotional talk and more about the actual nuts and bolts of budgeting. As a pair, the two books (this one and Total Money Makeover) would give you a pretty good plan for getting your money back on track. You’d have good budgeting advice as well as the emotional stuff.
Have you ever read this book? What did you think?