Book Review: The Tightwad Gazette

I don't know that you can consider yourself a 'true' penny pincher, money-saver until you've read haven't read the Tightwad Gazette by Amy Dacyczyn! And...once you read it, you may realize that all of the great new tips you read on money saving blogs aren't really THAT new. This book is jam-packed full of money saving tips, some that might seem a little extreme to some, but the majority of the ideas are very reasonable and applicable! And...depending on how much of a 'frugal zealot', certain ideas labeled 'extreme' by some may not be considered so 'extreme'. For example, dumpster diving isn't really something I'd like to do, but it can result in some great treasures, for free!

WARNING: this book is 900+ pages long. So, it will probably take you a while to get through it! 

As I was reading through the book, I jotted down some tips I thought would be easy to implement in our lives to help us save money. These were things that I knew would be easy and fairly effortless to do! And while I don't know that they will save us a lot of money in the end, it's important to remember that little savings add up!

Here are some of my favorite money-saving tips:

• Clothing Inventory: With a new baby coming, and a lot of unsorted baby clothes...I was a little overwhelmed! Organizing them, and compiling my inventory helped me see what I did and didn't need. Now, when I go to the store and see an outfit I want to buy, I can't blindly justify it by saying well, I probably need this for the baby (for better or worse!) Instead, I can know exactly what to look for to finish of the baby's wardrobe! And, it has helped a lot with my son's clothing, too. Once Garage Sale season starts, I will bring my clothing inventory with me so I buy the right amount of the stuff I need! 
• Powdered Milk: This is one thing I thought I would never do- I remember drinking powdered milk a few times when I was growing up and I hated it! And, my husband is a little picky about his milk. If I were to replace his milk with powdered milk, it might result in a a divorce. But, having a pitcher of powdered milk in the fridge to use for cooking is definitely doable! I've already been able to cut the amount of milk I buy in half, which probably saves a little more than a dollar a week. 
• Cloth Diapers?: In theory, they sound great, and the money saving makes them seem a lot more appealing to me. But, then I woke up and realized I was being crazy. I don't think I'd enjoy doing cloth diapers, and love being able to throw disposable diapers away! So...sorry earth, and budget. No cloth diapers for me! 
• Gardening: This is one I won't really be able to do for a while, since we live in an apartment complex. But, I think I'm going to try planting a few herbs to keep on my patio this summer. This will be more for fun than to save money.
• Cheaper Breakfasts: I spend a lot of money on breakfast cereal! My husband eats it every morning for breakfast, and sometimes I do too. However, even with double coupons, it is one of the more expensive 'breakfast foods'. Once again, my husband is a little picky with certain foods. So, rather than enforce a no cereal policy, I decided that I'm going to try having 1 day a week where we eat like poor people. I call it Waffle Wednesdays. We'll either have oatmeal or muffins for breakfast, peanut butter sandwiches for lunch, and waffles or rice and beans for dinner. If it goes well, I may start increasing the number of days we have cheap meals, but we'll have to see. I think a happy husband is well worth the few extra dollars a week for milk and cereal. 
• Using Less Dishwasher Soap: This is one I'm going to experiment with. We seem to go through dish soap pretty quickly, and if I could get my dishes clean with half the soap, that would be great! 
• Not Rinsing: I am in the habit of rinsing off my dishes before I put them in the dishwasher. After reading this book, I realized that not only did it take more time, it costs more money! That was finally reason enough for me to justify not doing it anymore, even though I like my dirty dishes to look 'clean' when they are in the sink. My husband didn't every verbally say "I told you so", but I'm pretty sure he was thinking it. 
• Homemade Granola: I've made granola before, and I love the taste! She has a recipe for granola that seems like it is a lot less expensive than the ones I've made before, mostly because it doesn't have nuts or fruit. And if you give a tightwad homemade granola...then she will want homemade yogurt (which I made from powdered milk!) 

Overall, I really like the tone of this book. She mentions many times that being frugal has allowed her and her husband to realize their dreams, and they have a lot of fun being frugal! One other point she stresses is the possibility of living on one income, especially when you have children. When you factor in all of the additional expenses of having two working parents, it might not be worth it! While the money is helpful, the peace of mind, freedom, and happiness is much more rewarding. 

 

Book Review: The Average Family's Guide to Financial Freedom

The Average Family's Guide to Financial Freedom by Bill and Mary Toohey was a slightly refreshing change to the other finance books I have been reading lately. While it does talk some about investing, and cutting expenses, it contains many other tips to help you save money that I hadn't thought of prior! 

Some of these tips include: 

• Not indulging your children: they will learn to be more self sufficient, and they will be less likely to get into trouble. (Save money on counseling, rehab, or other costs associated with teens getting into trouble) 
• Spending time building your family relationships: This helps your children develop their character, one that will allow them to leave home with the confidence and ability to succeed in the real world. (Which means they won't be living at home, or on your dime!)
• Getting enough sleep: If you aren't sleeping well, it affects every area of your life, including your stress levels and health.

Overall, these tips are all geared towards living a simpler life, whether it is less spending, learning to do things yourself, or finding ways to make a smaller space work. One example is their recommendation of only having one bathroom (I would prefer two, but I understand the principle). They have figured out a way to schedule showers, etc, and have a basket for each child for their toiletries when it is their turn to 'get ready'. They also keep a whiteboard on the bathroom door so they can write down things they may be in need of.

One nice thing about this book is that it doesn't spend a lot of time enforcing budgets, rather they focus on reducing your expenses by 'reducing' your lifestyle. In fact, they even say that it is important to indulge yourself every now and then so you don't feel like you don't have any money. I think this is a healthy thing to do, as long as it is in moderation. 

There is a chapter dedicated to teaching yourself about investing. It contains some great resources, but that wasn't my favorite part of this book. I really like the idea of simplifying your life, and they write the book in a very readable, relatable voice.

Book Review: The Millionaire Next Door

Here's another top 5 finance books review! The Millionaire Next Door was a great book with lots of research about how people who are real 'millionaire's live, including what kinds of cars they buy, where they buy their clothes, etc. If you're looking for a finance book with straightforward steps, this may not be a good book, but it does give some tips for making sure you are living like a millionaire.

Overall, the people who seem like they are rich are not the ones that are- in fact, you may even have a millionaire living next door, in your average neighborhood. They won't drive a nice car, or even buy nice clothes, or make a large amount of money each year. The key to becoming a millionaire is to live within your means, and save. People who make lots of money, but then spend it all on expensive cars, etc. 

Like I mentioned before, this book has lots of research in it, and is very interesting! I used to think that as we made more money, I would want to increase our 'standard of living', including a bigger house, nice new furniture, nicer cars, etc. But, I've since decided that I like living comfortably, and that I am just as happy without those things! While I don't think it is bad to buy nice things, I have found that I really don't need all the things I thought I needed. I really like the idea of being the millionaire next door, even if it means I drive my old green minivan for years to come.  

Book Review: The Automatic Millionaire

Remember the list of the Spendwise mom's favorite finance books? Here's another book review!


The Automatic Millionaire by David Bach is another great finance book, especially for those that have a hard time budgeting. The main principle he stresses in this book is the importance of automating everything: savings for retirement, mortgage payments, etc, because then you don't have to do it yourself! Also, when you automate, you take out money for yourself first, and then you only have what is left over to spend on your other expenses. By conditioning yourself to living on less, you are saving without realizing it.

One of my favorite concepts he talks about in the book is the latte factor. The latte factor refers to something we buy regularly, but that isn't extremely expensive. Because we buy it so often, we don't realize how much we spend on it. For example, if you buy a coffee for $3.00 every day, that is $3.00 you could be investing...and over time, sacrificing that coffee can save you thousands, not just from the money you don't spend, but also from the interest you gain from investing. I believe he mentions this in one of his other books, Smart Couples Finish Rich (which is another great book for anyone who is married, and could make a wonderful wedding gift, too!). And, my impression is that it isn't a new concept- in fact, the ideas he presents are not new, he just shows how to apply them in the automatic setting.

I decided to see what my latte factor was: before, it was the vending machine near my office on campus. I am no longer in school, so I don't have that temptation anymore. But, since we've moved, I've developed a new latte factor: french fries. My son LOVES french fries, and it is so easy to stop by and get him a snack when we go out on errands, especially when he is being an angel. And, while I don't buy them every day, I will usually get them once a week. So, I'm going to try to stop buying fries, and either pack a snack or just wait until we get home!

This book also has a great list of resources for the beginning investor, and it is at a very readable level (even I could understand it!). His examples illustrate the principles behind investing. In particular, there is one page where he shows what effect that time has investing. If you start now, you can make a lot more than if you were to put the same amount of money at a later date.

Many of the ideas he mentions are nothing new. In fact, as I was reading this book, it was interesting to me to see what similarities there were between this, the Millionaire Next Door, and Total Money Makeover. So, I would recommend reading one of the three, unless you really like reading finance books. This was definitely my favorite of the three. It is a lot shorter, is a lot less 'strict' than Total Money Makeover, and has a well laid out plan to achieve what is mentioned in The Millionaire Next Door.

Book Review: Total Money Makeover by Dave Ramsey

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!

I recently read Dave Ramsey's book, The Total Money Makeover. Overall, I thought this book was excellent if you have a lot of debt, or even if you want a very basic, easy to follow plan for ensuring you will be set for the rest of your life! He breaks the money makeover into baby steps:

1. Save $1000 for your emergency fund
2. Pay off all debt (non-mortgage) using the debt snowball
3. Save 3 to 6 months of expenses
4. Save 15% of your income into retirement (Roth IRAs, etc)
5. Save for your children's education
6. Pay off your mortgage early
7. Build wealth through investing and give to others

The baby steps are very simple to follow, and go in a pretty good order. However, my husband didn't quite agree with the order of the steps, and neither did Frugal Dad. My husband didn't think we should finish our emergency before we started saving for retirement, especially since he has a goal or retiring at 50, and I agree with him, completely. So, we are concurrently saving for retirement and our emergency fund, combining step 3 and 4 into one. Combined, we are saving a little over 15% of our income, so we feel like we're doing a pretty good job, even though it isn't exactly the same as Ramsey's steps. Also...we keep using our credit card for the cash rewards, (but we never carry a balance!) It sounds like Frugal Dad adjusted the steps to fit his situation, as well, but it looks like it was a little more complicated than for our individual situation.

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!

Financial Books I Would Like My Kids to Read

We have never paid our kids for grades. If we did, we would probably be broke. We have always wanted them to do something because of the desire from within. It is good to be self motivated to do the right things. There is one area, however, where I am willing to pay my kids if they will read any of these financial books on this list. As a parent, I appreciate having another source for them to learn wise financial principles. They help reinforce what we want them to know. For example, I paid my youngest daughter $5 to read "The Richest Man in Babylon". She now knows all about little men and has save hundreds of dollars that she has earned in the past year playing in a band and pet sitting. She has learned more when she was 14 then some adults learn their whole lives about being wise financially. Was it worth my $5? You tell me. I feel like the small investment I made was well worth it. Another one of our kids enjoyed the "Automatic Millionaire". He now puts money in an IRA even though he is still in college. This year, I plan on offering the same offer to our kids and to our in-law kids. Whoever is willing to read any of these books on this list can earn $5 for each book.

Our favorite one: The Average Family's Guide to Financial Freedom by Bill and Mary Toohey
David Ramsey's Total Money Makeover
David Bach's Automatic Millionaire
The Millionaire Next Door by Thomas Stanley
The Complete Tightwad Gazette by Amy Dacyzyn
The Way to Wealth by Ben Franklin (very short)

In addition, any other financial book that they are interested in that we agree on ahead of time.

Do you have any financial books that you really like?

Ben Franklin - The Way to Wealth Book Review

This is a fun little book filled with wisdom from "Poor Richard". You will recognize some of the following:

There are no gains, without pains.

He that lives on hope will die fasting.

Little strokes fell great oaks.

A small leak will sink a great ship.

A ploughman on his legs is higher than a gentleman on his knees.

When the well's dry, they know the worth of water.

He that goes a borrowing goes a sorrowing.

Tis hard for an empty bag to stand upright.

Rather go to bed supperless than rise in debt.

The book above also has different writing by Ben Franklin, but you can just buy the small book called the Way to Wealth by itself. It is a quick read and is only about 30 pages long at the most. Most libraries should have it or have access to it.

I always like to read a book first before I decide to buy it or not.