There are quite a few personal finance books out there, and many of us have read or heard of some of the well known ones. For example, the book The Millionaire Next Door is practically viewed as a classic by a number of personal finance bloggers, as it provides insight into habits millionaires tend to have with their money.
When it comes to books that help the layperson learn how to structure his or her own financial life, books out there run the gamut, in my opinion. I recently had the opportunity to read Doug Warshauer’s book If I’m So Smart…Where Did All My Money Go?, and was curious to see what made this book different from other personal finance tutorials, and how well it presented personal finance lessons to readers.
First off, this book is uniquely structured in story form in order to teach financial concepts. There are a series of characters, each attending a personal finance seminar, that have the opportunity to ask questions and share their thoughts on different topics. Just a few examples of the characters includes:
- Joe, a 23 year old college grad with some work experience, but a fair amount of consumer debt early in his adult life. He’s concerned about his financial future, and wants to learn what he can do to get on track.
- Eric and Sally, a married couple in their 30’s who own a home at the market’s peak, and have their own specific financial concerns
- Andrea, a single mother in her 40’s, who’s trying to save for retirement and college costs on a limited single income
These people, along with the others, create a storyline to follow as the topics of personal finance are discussed. Each of these people has unique concerns in life, and those concerns are built into the story and come out in the questions that they ask in the seminar – as well as in the comments and debates they have.
The story, character-based theme is actually very easy to follow, and allows the relevant topics to be discussed in a way that’s understandable to even personal finance novices. Yet, it’s a good read for those of us who are more advanced in personal finance knowledge who want to tighten our perspective on things and even learn some new tips as well.
To bring the story together in a semi-structured form, there are 5 steps that are outlined by Warshauer, which present a big-picture game plan. These “Big Steps” are:
- Control Spending and Debt
- Save for Short-Term Goals
- Invest Wisely
- Save for College
- Save for Retirement
These bigger categories contain advice on a number of more specialized topics, with specific advice on each. For example: contributing to a separate “auto fund” regularly, so you can buy your next car with cash. Another example: buying a home only if you expect to live in it close to 10 years.
For specific recommendations, there was good discussion by the fictional characters in the book which allowed us to see the thoughts and emotions people might be facing when faced with a decision. Also, the dialogue between instructor and participants gives credibility to the readers, who may be having some of the same thoughts themselves.
The one thing I see differently is the 10% recommendation of how much to save. I think it’s wise to save a greater percentage than that if possible. That said, many folks have lives that are structured in a way that’s difficult for them to save a lot at them moment, and for a big portion of the target audience, this is actually good advice by Warshauer to get them moving in the right direction. I certainly get how this works for purposes of the book.
Overall, I recommend the book. It’s especially good for people that are well-meaning, intelligent folks who want to improve their financial position but need some help understanding how to structure their financial life. That said, even as a personal finance blogger and someone with an MBA (and one concentration being Finance), I still found some tips here that were new, enlightening, and got me to rethink a few of my approaches to certain financial situations.
Note: I did receive a copy of the book from the author, which in no way influenced the review.