Your Money_ The Missing Manual - J. D. Roth [2]
About This Book
Based on my research—and my experiences with what does and doesn't work—I've developed a list of 14 guidelines that form the basis of my financial philosophy. These ideas lurk behind every page of this book:
Financial success is more about mastering the mental game of money than about understanding the numbers. The math is simple; it's controlling your habits and emotions that's hard.
The road to wealth is paved with goals. Without financial goals, you have no direction, so it's easy to spend money on things you'll regret later. But if you're saving for a house, your daughter's college education, or a new car, your goal will keep you focused.
To build wealth, you've got to spend less than you earn. Successful personal finance is all about building positive cash flow (which you'll learn about in Chapter 4). That's easy to say, but not always easy to do.
Saving must be a priority. Before you pay your bills, buy groceries, or do anything else, you should set aside some part of your income. Start small if you have to (even $25 a month is good), and then increase your saving rate with time.
Small amounts matter. Your everyday habits have a huge impact on your financial success, so don't be frustrated if you can only save $25 a month for now; I started small, too. Small changes help build good habits, and they can make a real difference over time.
Large amounts matter, too. It's good to clip coupons and to save money on groceries, but it's even better to save money on the big stuff like buying a car or house. By making smart choices on big-ticket items, you can save thousands of dollars in one blow.
Financial balance lets you enjoy tomorrow and today. Being smart with money isn't about giving up your plasma TV or your daily latte. It's about setting priorities and managing expectations: choosing to spend only on the things that matter to you, while cutting costs on the things that don't.
Slow and steady wins the race. The most successful folks are those who work longest and hardest at things they love to do. So try to find ways to make frugality fun, and recognize you're in this for the long haul. Remember that you're making a lifestyle change, not looking for a quick fix.
The perfect is the enemy of the good. Too many people are afraid to start getting their finances in order because they don't know what the "best" first step is. Don't worry about getting things exactly right—just choose a good option and do something to get started.
Failure is okay. Even billionaires like Warren Buffett make mistakes, so don't let one slip-up drag you down. Use failures to learn how to do better next time.
Nobody cares more about your money than you do. The advice that others give you is almost always in their best interest—which may or may not be the same as your best interest. Don't do what others tell you just because they're compelling. Get advice from various folks (and books like this one), but in the end, make your own decisions.
Each person is different. There's no one right way to save, invest, pay off debt, or buy a house, so don't believe anyone who says there is. Experiment until you find methods that work for you.
Action beats inaction. It's easy to put things off, but the sooner you start moving toward your goals, the easier they'll be to reach.
It's more important to be happy than to be rich. Don't be obsessed with money—it won't buy you happiness. It'll give you more options, sure, but happiness is what makes life worth living. If you can stay happy and in control of your life, money will be easier to manage.
Your Money: The Missing Manual will show you how to kick debt to the curb, save for the future, and pursue your financial dreams. I've done my best to write the book that I wish I'd read 20 years ago—before I got deep in debt. My hope is that I can help you avoid