It’s annoying when a system meant to make your life flow more smoothly eats up more time than it frees up. I find most financial advice books to be irritating that way. Write down every penny I spend, REALLY??? That’s why I cheered when Elizabeth Warren and Amelia Warren Tyagi’s 2005 book All Your Worth: The Ultimate Lifetime Money Plan recommended “Count the Dollars, Not the Pennies.”
I should mention that this post is NOT financial advice, and it’s probably a good idea to talk to a financial professional before implementing the advice in this book or any other. That said, I admire the savvy and time-efficient money-management system they recommend.
They suggest a baseline budget analysis, to be reviewed once a year or when life / budget circumstances change. They recommend aiming at spending targets of 50% needs and 20% savings (and explain ways to adjust these percentages if they’re not realistic for your life). They discuss strategies for paying down debt and building up a nest egg. Unfortunately their chapters on dealing with financial emergencies are obsolete because of changes in personal bankruptcy laws. I hope that the authors will issue a revised and updated edition of this book sooner rather than later!
I particularly enjoy their approach to fun money, summed up in the title of chapter 4: “If you can’t afford fun, you can’t afford your life.” In their system, 30% of your money should be for fun spending!! Yay! They encourage cash for everyday purchases, and point out that you don’t need to record details (gasp!), as long as you stop spending when you run out of your allotted fun money for the week or month.
In short, this is a flexible, unfussy money system that needs minimal periodic maintenance. Perfect for the academic lifestyle.