Book Review: GetRichSlowly Blogger's New Personal Finance Book

Having written a few personal finance books myself, I always enjoy reading what others have to say on the subject. There have been hundreds of thousands (millions?) of pages in books, websites, magazines, and newspaper columns dedicated to financial advice. Of course, most of these pages could be summarized into one simple concept that you could fit on a Post-It Note: "Spend Less Than You Earn." One of my favorite Saturday Night Live skits exemplifies this concept.

So, why do so many authors (including myself!) continue to write personal finance books? We each have our own perspective on how to spend less than we earn, what we should do once we have some savings, and how to protect ourselves from the unknown.

This leads me to a new book written by J.D. Roth, the popular personal finance blogger from Get Rich Slowly (www.getrichslowly.org). I strongly encourage you to check out his site. It has some fantastic information and resources, and J.D. has a passion for sharing what helped him overcome debt and get right financially.

J.D.'s book is titled Your Money: The Missing Manual, and it provides detailed explanation and advice on understanding 14 necessary guidelines for finding financial freedom, security, and happiness. Here's a brief overview of his 14 principles:

1.) There is a definite relationship between money and happiness, but the more you spend does not necessarily ensure your happiness. By avoiding over-consumption, you can find fulfillment and achieve your pinnacle of happiness by living with enough.

2.) Turn your dreams into achievable financial goals to give your life purpose. Goals are a means, not an end to attaining happiness. The process of working hard towards reaching your goals will bring you the most happiness and fulfillment.

3.) When you budget successfully, you can save for the future while having fun in the present. Effective budgets reflect both reality and your personal values to create an affable balance of your wants and needs.

4.) By understanding the basics of positive cash flow, you can avoid spending more than you earn to reduce your debt. Track every penny to ensure conscious spending.

5.) Don't fall victim to the "tyranny of stuff". Avoid allowing material items to bring you comfort and fulfillment. Instead, practice thrifty spending habits to live a rich life on a budget.

6.) Beyond thrifty spending choices, increasing your income through your career can catapult your finances to higher levels. To effectively manage your career, know how to find the right job, effectively negotiate a raise, and decide when it's time to move on to the next job.

7.) Banking can be fun, so long as you make savvy decisions to choose the right bank and select accounts that will benefit you. Don't choose a bank, because they are giving out free coffee mugs and Frisbees.

8.) Treat credit like a chainsaw. Use it carefully so you don't hurt yourself. Take advantage of rewards and features your card may offer, but remember that the money you are spending isn't free. Credit card companies are not your friend.

9.) Saving money on bigger purchases like cars and vacations will have a huge impact on improving your positive cash flow. Avoid becoming emotionally invested in making these decisions to remain in control and ensure the savviest spending choices.

10.) Housing expenses cost you more than you spend on your health, food, clothing, and entertainment budgets combined. By making conscience decisions on managing housing expenses, you can exponentially improve your finances.

11.) Taxes and Insurance may be boring, but understanding them will help prevent future peril. Choosing the right insurance will manage your risks in the event that an accident occurs. Managing your taxes will allow you to avoid audits and be able to take advantage of all deductions you are entitled to.

12.) If you can't explain your investments to a second grader, you're making things too complicated. Think long term and avoid following investment trends to earn solid returns.

13.) You can do anything you want in retirement, as long as you start saving now! Focus your retirement saving based on your spending habits (not your income) to best reflect your lifestyle.

14.) The true importance of having wealth is the freedom it gives to fulfill your goals, be free from worry, and spend time with the people you love.

In Roth's comprehensive guide to effectively managing finances, he closes by again reflecting upon the relationship between money and happiness. Wealth is a tool to help attain happiness, but real happiness comes from feeling satisfied and grateful for what you have. "True wealth is about happiness," says Roth, "It's more important to be happy than to be rich."

Check out J.D. Roth's blog at www.getrichslowly.org. If you like what you see there, you'll enjoy his new book. It will help you get your finances back on track, because there's nothing wrong with being happy AND rich...

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