The Ultimate Lifetime Money Plan
Elizabeth Warren and Amelia Warren Tyagi
New York: Free Press
There is also a trade paper edition of All Your Worth that came out in 2006.
I realize it is unusual to start a book review with a request that people reading the review make a contribution to the senior author (see above link), but said senior author (What else can I call her? They're mother and daughter.) is presently running for the Senate.
Yes, THAT Elizabeth Warren.
There is an introductory chapter: "Getting Started: The Truth About Money". One of the truths being that the rules for dealing with money have changed, because the way money is lent out has changed. They say, "This book is for anyone who wants control of his or her money, once and for all." And they mean it. They talk about their own situations and how it came about that they wrote this book. They talk about what they intend to show the reader about dealing with his or her own situation.
Don't skip the introduction - it's as well written and as fun to read as anything else. Also, you will already be feeling better about yourself by the time you get into the body of the book.
Part 1 is entitled "6 Steps to a Lifetime of Riches". Strangely enough, there are six chapters.
Step One: Count All Your Worth
Step Two: Escape from the Thinking Traps
Step Three: Count the Dollars, Not the Pennies
Step Four: If You Can't Afford Fun, You Can't Afford Your Life
Step Five: To Build Your Future, Pay Off Your Past
Step Six: Build Your Dreams a Little at a Time
They walk you through figuring out what your average monthly after-tax income is, step by step - what to include (and why), how to calculate an average if your income is variable, and why you are going to be working with the numbers for just a single month. They divide the things you spend on into "Must Haves", "Wants" and "Savings", and tell you how to figure each category out according to your own life. They are quite straightforward about the percentages of income you are aiming to spend are 50% for Must Haves, 30% for Wants and 20% Savings. They view that as a balanced proportion of spending for anybody.
When I finished working my own finances out, I was much cheered to have calculated that I am actually at the 20% savings (contributions toward retirement accounts, and the extra paid each month on the interest bearing bills count toward the Savings category). Now I have to work on getting the other categories balanced - that IS what this book is about - and was almost as much cheered to realize that I was already doing many of the things required for my personal situation.
Part 2 is entitled "Powerful Tools", and includes three chapters:
Love and Money: Having It All
The Big Buy: Purchasing the Home that Is Right for You
Financial CPR: Protect Yourself When Things Get Tough
These are exactly what they sound like - one chapter on dealing with financial situations involving significant others; one on what to consider when you think about buying a house; and one covering ideas for what to do when things fall apart, including divorce, major illness and bankruptcy.
And then there is
The Last Word: It's Not About Money.
The stories of the clients and friends and family that are scattered throughout the book are interesting and frequently make the point very neatly. The book is well written, easy to follow, and actually fun to read.
Working through the calculations might be rather more complex for many of you than it was for me (everything I needed was either on my paystub or my hard drive), but I guarantee it is worth the effort.
I have checked, and both Powells and Amazon have All Your Worth available. Those of you with local bookstores can check there, too. Or your local library. I say go for it, however you get your hands on this book, it will be well worth it.
I realize it is unusual to end a book review with a request that people reading the review make a contribution to the senior author (Elizabeth Warren ActBlue page), but said senior author (What else can I call her? They're mother and daughter.) is presently running for the Senate.