A Great Read: “All Your Worth”

I’ve always had a pretty laissez faire attitude toward my finances. I’m thrifty by nature (I was one of those kids who would save my little weekly allowance for months on end to buy “big ticket” items like a push-scooter or a Gameboy) and married a thrifty man. We don’t use credit cards, so we’ve always just sort of let things work themselves out. The other day, though, it occurred to me that we’re still in grad student mode: we always pay our bills, but we aren’t really saving for the future (retirement, college for W, etc). Sure, we have our 401Ks through work, but we haven’t really evaluated whether those are well-invested or whether they’re enough to actually provide for us in the future. Consequently, I decided we needed a financial check-up, and possibly a financial makeover.

Unfortunately, while I have a good head for science, I’m not a financial wizard. I’m not even particularly financially literate. My mom, however, is (not just literate, but a wizard). She recommended a book by Elizabeth Warren and her daughter, Amelia Warren Tyagi, called “All Your Worth.” I checked it out and loved it so much I had to share.

The premise of the book is relatively simple: for financial security, money needs to be in balance. Balance means that 50% of income goes toward “must haves,” 30% goes toward “wants,” and 20% goes toward lifelong savings. I was a little skeptical at first, both because of the percentages (they seemed off to me, and furthermore, I was suspicious of the notion that the same percentages would work for everyone) and because I didn’t really know whether a plan this simple really required a whole book (I hate reading books that take 200 pages to justify a paragraph’s-worth of information). Upon further reading, however, I realized that the book doesn’t just justify the idea, it actually gives practical, how-to advice on achieving money balance. Furthermore, it has simple investing tips, provides information on getting out of debt (for those who need it), has tips on avoiding common scams, and is packed with common sense advice.

What did I like best about the book? Unlike most financial books out there, which tell people who already have lots of money how to make MORE money (“don’t work for your money! make your money work for you!”), this one tells the average person who doesn’t have a pile of investments how to build a solid nest egg for later in life. Definitely worth a read.

How about you? Have you read any great finance books?