I don't know if you saw this post, but I thought it might be nice to post a review of each of my favorite finance books, little by little! I know this book has been around for a long time, but I think it's still a relevant, good read!
- Save $1000 for your emergency fund
- Pay off all debt (non-mortgage) using the debt snowball
- Save 3 to 6 months of expenses
- Save 15% of your income into retirement (Roth IRAs, etc)
- Save for your children's education
- Pay off your mortgage early
- Build wealth through investing and give to others
Another critical concept he talks about in this book is the gazelle intensity: the idea that you will do everything in your power to cut back your expenses and save or get rid of your debt. This includes working extra jobs or hours, selling things you already have, and cutting down your budget to just the basics. He says, "If you will live like no one else now you can live like no one else later." It's a great quote to post somewhere you will see it often!
The book is full of anecdotes of people who have had a great money makeover, which sometimes interrupts the concept he is talking about. But, it is motivating to read the success stories of others, some who are in a lot more debt than we can even imagine!
After reading this book, I felt both encouraged and discouraged: I feel like it gave me a great end goal, and the steps necessary to get there: but, since we've been doing a pretty good job with our finances, there is no possible way we could accomplish the steps in the few years time that he says is average. I wondered if maybe we weren't being 'intense' enough, so I started thinking of any ways we could either decrease our expenses or increase our income.
My husband and I talked about ways to increase our net income. We first looked at our budget to see if there was any way we could cut back to increase the amount of money we were saving towards our Emergency fund. We couldn't really find much to cut out, which was good, and bad. It's good we aren't spending more money on things we need, but there's no easy way for us to put lots more money into our emergency fund! So, we looked at what we had around the house to sell, and had a similar experience: there was only one thing I thought of selling, my Kitchenaid, but we decided that it would be wise to keep that. We got a great deal on it, and I use it frequently to cook. Lastly, we looked at ways we could increase our income by working, and the only possible way of doing that would be for me to work more than I do, or for my husband to get another job in the evenings. I currently work as an online tutor about 5-7 hours a week, during my sons nap time, and while it is a very flexible job, we've both decided that we didn't want to sacrifice our family time in the evenings for a few extra dollars. We feel like we're doing a pretty good job, but since we don't have debt, we don't feel like we need to be as intense as he recommends.
In summary, the take home message of this book is GREAT, but don't get discouraged if your own Total Money Makeover takes longer than he recommends. Just make sure you keep saving, and following his steps, adapted to your situation, little by little!
Have you read this book? If so, what did you think about it? I'd love to hear your comments/link ups!
If you haven't read this book, I would challenge you to try to read it before the year ends. As you make your New Years resolutions and goals, incorporate his principles into your list and make some awesome financial goals. For example, we decided we want to finish our emergency fund by the end of the year. And feel free to post your goals and link up!