Book Review: All Your Worth

Happy New Year! Hope you all celebrated safely and responsibly! 😉 Eh, I hosted a family party and everyone was home by 10. The boys are going to crash hard and ugly later.

But I digress! It’s a new year! A fresh start, a clean slate! Time to make new resolutions, insist on new decisions, and follow through with new actions. And one of those new resolutions is almost always to get personal finances in order. I started working on our budget this fall, reading to give me new ideas and new hope. See, I have managed our finances since we got married, mainly because I had “more time” than Tom did. And while we’ve always done well and saved and paid our bills, I always felt I could do better. I’m not alone in this; Denise at eatplaylove wrote a great post on this today that sounded so familiar to me.

Enter the book “All Your Worth: The Ultimate Lifetime Money Plan” by Elizabeth Warren and Amelia Warren Tyagi. It’s been out a couple of years, but is more relevant today than ever. And as I read it, I found myself nodding and agreeing with what the authors said. See, it’s a different kind of budgeting book. The ones I’ve read in the past usually focused on the small purchases: drop that weekly latte, write down every.single.purchase. for a month, avoid anything pleasurable because it will cost money. To me, that’s no way to live. If I want a freaking latte, I’m getting a freaking latte. I don’t go that often and I refuse to feel guilty. And I will not write down every single purchase for a month. Are you kidding me? I barely remember to get the kids’ teeth brushed, keeping track of every red cent would send me over the ever-lovin’ edge. And I could never figure out how to budget things like utilities, which change every month. Drove me insane. The authors have a different take. They divide a budget into three separate entities: Must-Haves, Wants, and Savings.

The Must-Haves are things like housing, utilities, food (food as nutrition, not necessarily as pleasure: ie, meals vs. XMAS cookies), and long term contracts. Must-Haves should be no more than 50% of the budget.

Savings is just that, money set aside. That’s 20% of the budget, and is actually broken down later in the book into different kinds of savings. This was invaluable to me. I knew we were saving, but now we have a direction and a plan.

And Wants is everything else, at 30% of the budget. These are things like entertainment, some kinds of food, and anything that doesn’t fall into the previous two categories.

If the budget is in balance, no worries. If not, you can see where it’s outta whack and bring it back under control. My book has become a workbook, with dog-eared pages and notes penciled in. It’s a work in progress; I haven’t finished our budget, but I’m close. I work on it, get distracted by things like, oh, Christmas, and then go back.

It is a hopeful budgeting book, the first one I’ve read that is actually hopeful. I can see this working for anyone, from kids learning to budget to seniors on a fixed income. It is obviously more detailed than I am explaining here, but I don’t want to get in any deeper or I’ll be here all night. I heartily recommend this book and will use the principals here for as long as they’re useful to me.

And if you don’t have Quicken, suck it up and start using it. Gathering all the numbers for the budgeting exercises in the book was a snap because I’ve been using Quicken for years.