Finance: The One-Page Financial Plan, Carl Richards

The One-Page Financial Plan
Carl Richards
ISBN: 9781591847557
A simplified direct approach to counteracting the tendency to do nothing when you can't do the best.
Read August 2016

Richards is very smart.  He knows that when faced with difficult decisions, the tendency is to waffle back and forth and to hesitate and not do anything, rather than have to know that you DID do the wrong thing (or even perhaps the not the absolute best thing).  This gets really bad when dealing with financial issues, because really, doing SOMETHING is generally better than doing nothing at all.

So he breaks things down into simple (not necessarily easy) suggestions:

Track your daily spending.

Make a budget or use expense-monitoring software and check to see if your ideas about your spending match reality.  Adjust either ideas or reality until they match.  Don't spend time feeling guilty if it's not a match, just make it match however goes best for you.

Figure out what YOU want money for, and what that looks like to you in 5, 10 years?
Security?  Travel?  Kids?  Retirement?  New house?

Keeping your current spending habits and lifestyle in mind, AND what you want for the future, start researching how much money you need to have put aside to make those things happen.

Write a single page that says basically: "We need x $ for our vacation this year.  We need y $ for replacing the roof.  We need z $ for our retirement fund.  We're doing THIS to make it happen."

Automate transfers and deposits and payments as much as possible - so you don't have to constantly think about "sacrificing" to meet your goals.

For emergencies or special-occasions, refer to your actual physical page of goals and needs before deciding.  You've really already decided, just be persistent and DON'T CHANGE YOUR MIND.

Remember things change - check your sheet and your plans purpsefully every year (not when you're tempted by a shiny special occasion or flailing in an emergency) and either re-affirm or modify.

Actually invest something.  Anything.  Find a good financial adviser and follow their directions, or make a 60/40 split in stocks and bonds.  Make stocks safe and VERY DIVERSE holdings.  Every year, take your gains and losses and redistribute them to keep the split at 60/40, and if possible grow the investments instead of cashing them out.  Investing works best long-term.  Anything shorter than a few years needs to be CDs instead.    

Nonfiction: The Opposite of Spoiled, Ron Lieber

The Opposite of Spoiled

Ron Lieber

ISBN: 9780062247018

Read February 14, 2015

Lieber is the personal finance columnist for the New York Times, and he's fielded a lot of questions from parents worried about how to talk to their kids about money and finances.  

He does a very good job staying clear of the minefields represented by "are we poor" and "are we rich" respectively, and tackles money talks mainly from the perspective of providing moral grounding ;"here's WHY this is something we buy/don't buy" and from a financial preparedness perspective; "if you get $5 in allowance every week, and you get 25% interest if you keep the money longer than six months, how much money will you have to spend on that enormous LEGO set you want?" and he also addresses obvious charitable giving (and other acts of charity) as well as the social awareness and responsibility that comes with being part of a country where wealth is so unevenly divided.

Excellent book, and a good resource for parents or teachers who want to make sure that kids are aware of how money works, and how to make it work for you, and how to be aware of the social and moral entanglements money and spending involves.