Financial Literacy Month: Book Review 1

As promised, in honor of Financial Literacy Month, I’ve begun some of my own financial learnin’! To start my journey, I pulled a couple of books off the shelf that I bought a while back and, up to now, have subsequently ignored.

I didn’t get more than a few pages into Beth Kobliner’s Get A Financial Life: Personal Finance In Your Twenties And Thirties, but only because I came to it way too late. One of the opening lines was:

"The bulk of [us] came of age financially to take part in the gore but not the glory of the go-go eighties."

I’m sorry, I just can’t read something that refers to the “go-go eighties” with a straight face. It’s my fault, the book was published in the early 90’s, and I bought it used a few years back. Oh well. This was well received at the time—there’s an updated 00’ version that I read excerpts from on Amazon, but conversely, now that Beth has stripped out some of the flashy language to make it more current, it’s lost some of its original spark.

The second book, Personal Finance For Dummies, 5th edition by Eric Tyson, was a vintage ’06, and holds up a little better! It was an easy read, and I was able to get through it in one long evening. A lot of this 448-page finance guide was taken up by Mr. Tyson calming down financial idiots like myself, who get panicky whenever they start planning for the future. It even had comics. I was able to skim, and kept cool and collected through the whole thing (well, I may have broken a sweat here and there).

This Dummies book was broken into 5 sections:

Assessing Your Fitness and Setting Goals – a little pep-talk and a step-by-step guide to gauge your financial health. I’d actually done a lot of the footwork for the financial assessment in this blog, so I didn’t have to run around trying to figure out where all my debt and money was.
Saving More, Spending Less– general savings strategies, retirement information, and a sales pitch to go buy a house
Building Wealth with Wise Investing – this offers some good information on different investment strategies (stocks, bonds, mutual funds, etc)
Insurance: Protecting What You’ve Got – this talked about the many varied kinds of insurance you should and shouldn’t get.
The Part of Tens – ten common financial mistakes.

I learned a few things. For starters, I think I can feel okay about my retirement portfolio, but Tyson's book points out that I am in the “BAD” category for debt, meaning my bad debt to income ratio is above 25%, if just. I’m at 26%, although I hope to change that soon!

Aside from giving me some tips on paying down my debt, Tyson's book also helped me come up with this additional list of action items:

1.) Look around for better car insurance rates
2.) Buy renters insurance
3.) Start thinking about buying a house

With three years of graduate school ahead of me and a nice buyers market, it might not be a bad idea for me to get some property. I’ll need to get serious about projecting out to when I can have my debt eliminated, and checking to see if banks are still offering zero-down mortgages (and if that’s a good idea).

The only thing I didn’t like about Tyson’s book was his sales pitch for financial planners. I’m not saying they’re not a good idea, it just seemed a little biased. What I loved was that Tyson encourages people to have conversations about finances within their family, and to work with kids on their finances. I wish I’d had that early training!

All in all, I thought it was a good beginner guide.