Your Money: The Missing Manual - Softcover

Roth, J. D.

Softcover

ISBN 10: 0596809409 ISBN 13: 9780596809409

Publisher: O'Reilly Media, 2010

Synopsis

Keeping your financial house in order is more important than ever. But how do you deal with expenses, debt, taxes, and retirement without getting overwhelmed? This book points the way. It's filled with the kind of practical guidance and sound insights that makes J.D. Roth's GetRichSlowly.org a critically acclaimed source of personal-finance advice.

You won't find any get-rich-quick schemes here, just sensible advice for getting the most from your money. Even if you have perfect credit and no debt, you'll learn ways to make your rosy financial situation even better.

• Get the info you need to make sensible decisions on saving, spending, and investing
• Learn the best ways to set and achieve financial goals
• Set up a realistic budget framework and learn how to track expenses
• Discover proven methods to help you eliminate debt
• Understand how to use credit wisely
• Win big by making smart decisions on your home and other big-ticket items
• Learn how to get the most from your investments by avoiding rash decisions
• Decide how -- and how much -- to save for retirement

Practical Tips for Saving Money from J.D. Roth

1. Saving is mental ... and easier if you avoid advertising

One of the best ways to win the mental battle to save is to reduce your exposure to advertising. Fight this by ignoring ads, or by learning to question their premises.

2. Customize your saving (or, how to create your own Wii account)

Each of us is different. We have different goals, we have different skills, and we have different mindsets.

Don't think of saving as a chore. Think of it as the golden ticket to getting the things you really want. I set up what I call "targeted savings accounts" at my bank, and I use these to save for my goals. When I wanted a Nintendo Wii, I opened a separate savings account at my credit union and I called it "Nintendo account." The teller laughed at me, but she understood what I was doing. It helped me save.

Each person needs to find a savings technique that matches her goals and abilities. If one method doesn't work, try another. Keep looking until you find a technique that works for you.

3. Starter goals: vacations, cars and retirement

A great way to develop the savings habit is to save for a vacation. We all love to take trips, right? Save for a fishing trip to Alaska. Save for a cruise to Belize. Save for a three-week tour of Paris. Whatever strikes your fancy. And once you've developed the saving habit, apply it to more practical things.

Another great goal is to save for a car. Too many people allow themselves to be trapped by a lifetime of car payments. It doesn't have to be that way. Develop a system that allows you to pay cash whenever you go shopping for a new vehicle. Earn interest on your car money instead of paying interest to somebody else.

And, of course, you should begin saving for retirement as soon as possible. This can be tough to do, especially if you're young. You think you've got decades to go, so why start today? You could use that money for a ski trip or a new iPad. But the sooner you start, the more time the extraordinary power of compounding has to help your money grow. If you don't think you can afford to (or want to) set aside 10 percent (or 25 percent, like my wife), then start small. Start with 5 percent. Or even 1 percent. Develop the habit and increase your saving with time.

4. Limit your long-term goals and keep track of short-term tasks

I only set a handful of long-term goals at a time. In fact, this year I only have one long-term goal. If we set too many goals, we spread our attention, and we're less likely to accomplish any of them. But if we concentrate on just a handful of things at once, we're more likely to do what we dream.

But while I don't have many long-term goals, I have a bunch of stuff I want to accomplish in the short term. To stay focused on these tasks, I use a simple but brilliant system I learned from Erica at erica.biz. I start on the first page of a spiral notebook. I make a brain dump of everything I have to do. Then I put the date at the top of the page. I refer to this list many times throughout the day, crossing things off the list as I go. If something else comes up that needs to be done, I add it to the bottom of the list. Every evening, I copy the list onto a new page and put the next day's date. This system works like a charm for me, not just for financial tasks, but for all tasks.

5. Memberships/subscriptions you can cancel

It can be difficult to give up things that we might consider "vices." For you, that might be the daily latte. For me, it's always been comic books. (Sad, but true.) These are constant money drains, but they also bring joy to our lives. Instead of giving these things up, I encourage folks to find ways to reduce them, or to save on them.

But to really save money, look for ways to reduce recurring monthly expenses. These are constant drags to your budget, and if you can reduce them, it's a great way to improve your cash flow. Some examples:

Cancel your cable television and start watching shows online at Hulu.com or similar services. Or, if that's too extreme, cut back from your deluxe digital package to bare minimum basic. I did this and saved over $600 a year.
Cancel your magazine and newspaper subscriptions. Yes, I know these industries are hurting, but so is your own budget.
Cancel your gym membership. Find cheap ways to exercise at home, including biking and running and yard work. Bodyweight exercises (like pushups and situps) are free and effective.
Cancel other monthly memberships. I used to pay $15/month to play an online videogame. Not only was this sucking my time away, but it was costing me $180 a year. I know that's not a lot, but when put together with other expenses, it can add up.
Cancel your cell phone contract and move to pay-as-you-go. In other countries, prepaid cell contracts are the norm. But for some reason, in the U.S., they're the exception, not the rule. As a result, folks end up paying through the nose, either because they have more service than they need, or because they don't have enough. With a prepaid plan, you only pay for what you need.

About this title

About the Author

J.D. Roth is an accidental personal-finance expert--a regular guy who found himself deep in debt. After deciding to turn his life around, he read everything he could about money and finance. In 2006, he started the award-winning website Get Rich Slowly, which Money Magazine named the Web's most inspiring personal-finance blog. Over the past four years, Get Rich Slowly has grown into an active community where thousands of readers a month share ideas on how to improve their financial lives. J.D. lives with his wife and four cats in a hundred-year-old house in Portland, Oregon.

Review

If you need a book on personal finance, "Your Money: The Missing Manual" is a solid choice. It gets all the important stuff right, and does a great job of distinguishing between that stuff (that you have to get right) and the peripheral stuff (that you can do any of several different ways, as long as you do it).

-- Philip Brewer,

J. D. Roth's book is a much-needed dose of reality in the world of personal finance, and I would strongly recommend it to anyone looking to "clean house" when it comes to their financial affairs.

-- Thomas Duff, --Thomas Duff

Your Money: The Missing Manual is not a cutesy quick-fix for those of you with the 'McDonalds Mentality.' If you're looking for something like that, keep looking. But if you're looking for a real manual, a text book if you will, on money management, spending habits, and the psychological insight needed to understand why we do some of the dunderheaded things we do, this could be your ticket. Your Money The Missing Manual can show you how to get out of debt and to truly understand what makes you, personally, tick. You will learn how to manage your resources so that you can pursue the things/activities that make you truly happy.

-- Artie Alinikoff, --Artie Alinikoff

Your Money: The Missing Manual a good, basic manual on learning how to manage your money in such a way that it doesn't consume you.

-- Miranda Marquit, --Miranda Marquit

If you need a book on personal finance, Your Money: The Missing Manual is a solid choice. It gets all the important stuff right, and does a great job of distinguishing between that stuff (that you have to get right) and the peripheral stuff (that you can do any of several different ways, as long as you do it).

-- Philip Brewer, --Philip Brewer

Edition details

• Publisher: O'Reilly Media
• Publication date: 2010
• ISBN 10: 0596809409
• ISBN 13: 9780596809409
• Binding: Paperback
• Language: English
• Edition number: 1
• Number of pages: 334