Tips for Smart Money Management
A compilation of real-life stories that illustrate the need for financial wisdom, Save Wisely, Spend Happily, by Sharon Lechter will inspire readers to examine their financial goals and consult a financial professional to help reach them.
Written with contributions from 125 certified public accountants, Save Wisely, Spend Happily is filled with sound, actionable advice. The tone throughout stresses the need to acquire practical financial management skills and shows readers that acquiring such skills is completely achievable.
Just about every personal finance topic imaginable is discussed, including:
- Goal setting
- Budgeting strategies
- Tax planning
- Money and marriage
- Money and divorce
- Money and children
- Paying for college
- Retirement planning
Author Sharon Lechter describes the book as “a field guide to personal finance. It can be read from cover to cover or… to navigate a specific situation.” She says that saving wisely makes it possible to spend happily: “Saving wisely means paying yourself first. Many people who think they spend happily find that happiness to be short-lived when the bills arrive and they don’t have the money to pay for their purchases.”
According to the U.S. Bureau of Economic Analysis, in 2012, the nation’s personal savings rate was 3.9%. That’s better than the 1.5% we were saving in 2005, but a far cry from the nearly 11% we saved as recently as 1982. Improving the nation’s financial knowledge is a goal of the American Institute of CPAs, and this book represents another effort toward reaching that goal.
Much of the book’s information is practical and easy to implement. In the preface, readers are advised to undergo an annual financial checkup, similar to a physical checkup, which can target a single issue, such as paying for college, or provide a broad overview.
A great and very practical idea is setting up a separate, “escrow” checking account that’s used solely to pay bills. Do bills arrive out of sync with your paychecks? Divide their payment amounts, according to your paycheck schedule, and “pre-fund” the escrow account. When the bills arrive, the money’s there to pay them.
The book also demystifies the stock market (somewhat) by explaining the rule of 10/3/1—how the market has historically expanded, contracted, and collapsed over every decade, on average.
Source: Black Enterprise | Robin White Goode