Stop Counting the Pennies!

There's a book I started reading a while ago, and only got about 75 pages in before my life got super busy, but think it's a great book. It's called, "All Your Worth, The Ultimate Lifetime Money Plan" by Elizabeth Warren and her daughter, Amelia Warren Tyagi. I've really liked Elizabeth for years. She's was appointed recently by Obama to develop the new Consumer Financial Protection Bureau. She really does seem to care about the shrinking middle class.

She gave a piece of advice in the book I think is really true. She says everywhere we go, we are told to save our pennies, watch the Starbucks, etc. She says that's wonderful, but they want us to spend our "precious minutes where they count most: your dollars. Instead of spending your time on how to squeeze a few nickels out of small purchases, it's time to focus on the really big expenses, where an hour on the phone can save you thousands of dollars. This step starts with an incredibly simple premise: Dollars are worth more than pennies."

I've always felt that we really blow our budget on our big purchases rather than one too many rentals at Redbox!

She goes on to discuss the big-ticket items, house, car, insurance, etc. She says, "If you are overspending on these big monthly bills, then money is draining out of your pocket a lot faster than you can replace it by getting double coupons on your frozen vegetables. She calls this step in her plan, "the foundational step for getting straight with your money.

Then comes the tough love.

"Who says you shouldn't spend all your money on a normal house and a normal car? We do. It doesn't matter if you are living in a regular house. It doesn't matter if you are driving an average car. It doesn't matter if all of your Must-Haves seem perfectly ordinary and no different from those of your neighbors. Because you can't use your neighbors as a guide. Why not? Because most of your neighbors are not building wealth."

She wants us spending no more than 50% of our income on "must-haves." Must haves being food, shelter, etc. This book was published in 2005. If everyone in the country had read this, it would have saved us all so much money. We would have been keenly aware if we really could afford the houses we were buying, etc. Anyway, more from her later. Such a voice of reason.