I’ve been reading lots of books lately. Granted, that’s no different from any other time, but here lately it’s been more nonfiction than fiction, which is strange. I’ve been reading a lot of vegan books and books on animal rights and the like. I’ve tried to read personal finance books, but they all focus on getting out of debt, not what to do once you are. We’re not quite ready to invest, and we’re not ready for retirement yet. I guess I don’t need a book to tell me that I need to be saving, but I like reading and it keeps me motivated.
I think I’ll start in on the Tightwad Gazette books again. I mentioned them the other day, I know. It’s a series of three books that are based on a newsletter that the author published for years. She was a Navy wife with several children and managed to save enough to buy an 18th century farmhouse, keep her kids clothed and fed, and live quite a contented life, all on about $38,000 a year. Granted, this was in the 1980’s and 1990’s so that salary was worth a little more than $38,000 is worth now, but it’s still impressive. She talks about everything from saving wrapping paper to dumpster diving. She didn’t do the latter, but provides information for those who want to go that route. Most of what she writes about is cost comparisons and tips to reuse or re-purpose things. She’s the originator of the price book idea – compare prices across different shops in your area on things that you regularly buy. Track prices for sales so that you know when things go on sale and can stock up enough to last you until the next sale. She wasn’t a coupon queen at all. Tips both mundane and way out there are included, many of them from readers of the newsletter who wrote in. These books always get my creative juices flowing on ways to reduce, reuse, and recycle.
(I’m not a fan of him injecting religion into money management books, but that’s just me.) Dave Ramsey’s book, The Total Money Makeover, was very influential in how I decided to pay off debt and my ongoing strategy. He freely admits that he didn’t invent any of the ideas he writes about, he just kind of stacked them together in a way that seems to work really well for many people. He popularized the debt snowball. Paying off your smallest debt first while paying minimums on all the others, then applying the money you used to pay to that smallest debt to the next bigger one until that’s paid off. Keep doing that until you are applying all the money you used to spend on all of your smaller debts to the largest one, and by that time you have quite a bit of money working to pay off that biggest debt quickly. Don’t pay off your house until a little later though, after you have your emergency fund filled out and are saving at least 15% toward retirement. Once you have the rest funded, then you can start paying extra toward the house payment. He claims that people who follow his plan average about 7 years from start to house paid off. Once that’s done it’s time to start investing and playing with your money. When I started, I wrote down all of our debts and their amounts. As I paid them off, I marked them off and put the payoff date on the paper. On the same piece of paper I have the rest of the plan laid out so that I have kind of a road map of where I’m going. It keeps me motivated to stay on track and look at the long-term picture rather than just what’s right in front of me.
Those are re-reads. If I run across any new books that I like, I’ll share them with you. Those are two of the ones that I keep coming back to though.