So my ‘live’ friends just left and now it’s just us, my bloggy buddies. And you get to learn what I learned from them, except you don’t even have to cook dinner or do any dishes!
(Okay, for any of the lovely friends that were here tonight, I REALLY don’t mind! And thanks for letting me try out a new dessert on you, too.)
My ‘live’ group is an ever-changing cast of characters, with a few repeats and a few newbies… but always interesting conversation. (And, yes, I am still lamenting over my perfect attender who missed tonight… But I digress.)
Just like you, each woman is asked to select any book relating to the topic at hand and share any observations when we meet.
In this post, I’ll share with you a few things about each book and a few ways each of us manages our own budgets at home.
Here we go:
Here’s what the group is reading, and a few observations from each:
Money Mastery (I didn’t get the authors or the subtitle.)
The authors suggest paying down debt by listing outstanding debt from least amount owed to most amount owed, and then paying it down in order.
For example, let’s say you owe $5,000 in account A, $7,000 in account B and $30,000 in account C. You would make payments on all 3, but pay account A more aggressively with a regular monthly payment. Once account A is completely paid, you would apply whatever amount you were paying account A to what you were already paying account B. Then, once B is paid, you would apply what you were paying B (which was originally A + B) to account C (and so on, as needed), until your debt is eliminated.
They discussed how often people will buy something using a credit card, then make only the minimum payment, not realizing that by only making the minimum payment they are guaranteed to be charged finance charges, causing something what might have originally been a ‘good deal’ to no longer be the low price originally paid.
The authors also pointed out that, at least in America, our spending is based most often based on emotion, not facts.
Our reader, like the rest of the group, has plenty more to read, but shared just these highlights.
Financial Peace by Dave Ramsey
Ramsey suggests paying cash for everything. In forgoing the convenience of a credit (or even debit) card, you will pay more attention to the money you are spending and curb impulse buys. If you only carry what you plan to spend, you cannot spend more.
The author suggested that true financial change will only happen when you are ready to make a lifestyle change, and not curb things for a week or even a month.
Basic Economics: A Common Sense Guide to the Economy by Thomas Sowell
This was the longest of the books at 551+ pages.
Our reader chose this book because she wants to gain a working knowlege of all the economy-speak of late and all the accompanying terms flying around. She’s a smart cookie who wants to understand what is going on herself, without relying on the media to spin it for her.
The book discusses the basics of economics in the US and the world and shows how economics ties such much of our politics and world together. The reader attempted to buy this at Half-Price books, but was told that anything by this author is usually gone in one day. Consequently, she was disappointed to pay full-price at the full-price bookstore, but encouraged by the popularity of the author. S
he had just bought it this morning and already had one chapter completed. She was also told that this book would make her a much more-informed voter. I am looking forward to what she will share with us at our next meeting!
The Millionaire Next Door by Thomas Stanley, Ph.D. and William D. Danko, Ph.D
I am only 55 pages in, and I am finding this book interesting. (I must blog and sleep sometime, or else I’d have more read!)
The authors studied a base group of millionaires to determine how they spent and saved their money on all sorts of levels. What they found is that most American millionaires are people who appear as regular people, yet they make very wise financial decisions in saving, enabling their net worth to grow.
They carry few credit cards and do not make purchases based on status. They drive cars that get them where they need to go and wear inexpensive clothes. They are largely of first-generation wealth, earning the money themselves and keeping it by living below their means and saving, saving, saving.
The authors found that America’s true millionaires (as defined by their net worth) do not have expensive taste… that is left to those who earn high incomes, who most often spend lavishly, leaving little for savings and, consequently, causing the those with higher incomes to often have a lower net worth.
And then we had one guest without a book selection. She came prepared to pay the price by bringing a bottle of wine, though, so we’ll forgive her.
We also discussed how each of us manage our budgets within our families.
One couple divides the expenses, with each spouse receiving a portion of money each month to cover his or her allotted expenses, with a discretionary amount to spend as he or she chooses. This discretionary amount is also used to cover any overages in each of the expenditures each spouse is managing. They also maintain a joint ‘slush fund’ for unexpected expenses, vacations and the like. The couple re-evaluates the numbers once a year.
Another stay-at-home-mom in the group negotiated a salary with her husband when she first left her outside employment. This stipend is completely discretionary and is to be used however she sees fit. All family expenses are paid from ‘his’ balance sheet. Her stipend has changed in relation to her husband’s bonuses from work and she renegotiated her stipend when baby number 3 came along.
Another couple saves before they spend any of their earned income, sets aside money for taxes and then determines monthly expenses. The couple then works out of two accounts, with the wife managing the family’s regular expenses out of ‘her’ account. This couple discusses monthly spending twice a year.
Whew! I hope I didn’t lose you through all that money talk, but instead inspired you to look into anything that might make you a better money-manager for your family.
Are you reading along this month, as well? If so, please leave a comment. If you are a blogger, please post about what you are reading and leave a link in the comments.
Okay, it’s getting L-A-T-E and I must go to bed. I hope all this makes sense in the morning!
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