Everything You Ever Really Needed to Know About Personal Finance on Just One Page

QueerCents is highlighting a simple resource on personal finance. A free 49-page pdf booklet that provides a quick & easy overview of the basics, The Simple Dollar has made this available for free. It can be viewed online and downloaded here. He summarizes it all this way:

Spend less than you earn. Earn more. Live frugal. Do something sensible with the difference. Control your own destiny. All of the other writing out there on personal finance is just details.

At the end of the document he provides links to other useful web sites (a few of which are part of my regular reading) and a list of 12 recommended books on the subject (including Dave Ramsey's The Total Money Makeover).

The Simple Dollar has other resources available including a plan for fixing your finances in 31 days. There's also a Facebook page.

How to be Financially Successful

"If you keep doing what you've been doing you'll keep getting what you've been getting."

5 minutes of advice from Dave Ramsey:

The Two-Income Trap: Why Middle-Class Mothers and Fathers are Going Broke

The video embedded below is an hour-long interview with author Elizabeth Warren. I've seen her in other presentations.



USA Today has an excerpt from the book. Salon.com has a print interview. Business Week's review is here. PBS has a page on her that includes links to 2 videos. NPR has an audio interview. Mother Jones Magazine interviews co-author Amelia Tyagi.

The Harvard Journal of Law and Gender has a review that discusses the issue and the remedies proposed in the book:

Their solutions include a voucher system for public schools, an expansion of public schooling to include prekindergarten education, a tuition freeze on state universities, a reinstatement of usury laws, a tax incentive program for family savings, a commitment to the preservation of bankruptcy protection, and an expansion of state-funded dis-ability coverage. Of particular interest is the discussion of tax-funded daycare programs. Warren and Tyagi argue against such programs, at least in their simplest form:

[S]uch subsidies would make financial life more difficult for these families [with stay-at-home mothers], because they would create yet another comparative disadvantage for single-income families trying to compete in the marketplace. Every dollar spent to subsidize the price of day care frees up a dollar for the two-income family to spend in the bidding wars for housing, tuition, and everything else that families are competing for . . . . In effect, government-subsidized day care would add one more indirect pressure on mothers to join the workforce.

This last point is a novel idea in the daycare discourse. A typical argument for such programs is that they provide mothers the option of working, but, in reality, they provide no option at all, compelling some mothers to enter the workplace despite their own preferences to the contrary.

The list of policy solutions offered by the authors is not groundbreaking, but its application towards the newly identified problem of the “two-income trap” is innovative and useful. For example, to the list of other potential benefits, proponents of school voucher programs can add the partial alleviation of the problem of middle-class bankruptcy. Thus, old ideas, pressed into service by Warren and Tyagi, are given new life in the political arena.

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In Debt We Trust

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part 9:

The Coming Collapse of the Middle Class

This is a one-hour lecture by Elizabeth Warren, who was interviewed in Maxed Out and Secret History of the Credit Card. She has authored books, but I have not read them.

This is an illuminating video. She compares the inflation-adjusted income and expenses for a 2-parent/2-child household from the early 1970's with that of a similar family from the early 2000's -the space of one generation. It's an everything-you-know-is-wrong moment and an important situation to give serious attention to. She fears we're moving from a 3-class society (in which there are a few rich and a few poor with a large majority of people firmly in a stable middle class) to a 2-class society (in which a slightly larger group of rich people is at the top and everybody else falls into a group of folks at high risk who can never hope to achieve firm financial footing).

I wish the Q&A had been included.

HT: Economist's View

Affluenza

Affluenza:

is a one-hour television special that explores the high social and environmental costs of materialism and overconsumption.

There is a teacher's guide here and a sequel.

At the opposite of "affluenza" is voluntary simplicity, and there are varying lifestyles in between. Many people are touchy and defensive about their position on the economic scale, and many are resentful of folks with more, but everything's relative. What's frugal to one family is extravagant to another. Reading blogs on this subject, both from a personal finance perspective and from a moral perspective, has been a real education on how people respond to the issue.

High school personal finance and economics sites such as this one tend to focus on money management, which is part of it, but there are also ethical issues involved. What are they? Do those economics texts even mention them? How will they figure in planning for the future? This sylabus defines "ethics" as

limitations a society imposes upon it members

What limitations does our society impose on our economic lives? I hear capitalism praised without restraint, and I hear "success" equated to economic prosperity, and I hear universal health care condemned as "give-away" Socialism.... Are the limitations our society imposes as few as they seem to me?

Here's a report on Economic Mobility in America.

And while you're thinking about money, take a look at this and think about how intertwined our use of money is with our ethics.

40 Days of Giving

Secret History of the Credit Card

Frontline's 2004 program:



Get Rich Slowly has a review.

Frugal Dad's 7-Day Turnaround

The Frugal Dad is posting a week of turnaround tips. I thought I might go along for the ride and post the results at the end of the week.

Day 1: Take an inventory of your finances.

This is basically a look at net worth, taking all the debt totals and asset totals and looking at the difference. It's encouraging to me to be debt-free except for the mortgage -Thank you, Dave Ramsey! I find the mortgage scary, though, and think of it as a debt rather than an investment, so debt totals are something I'd like to have at zero.

Day 2: Build an emergency fund, quickly.

The first of Dave Ramsey's "Baby Steps" is to have $1,000 to start an Emergency Fund. The Frugal Dad is advocating a minimum of 3 months of living expenses or $10,000 for this fund. He recommends getting the fund up to the $1,000 mark within a month by selling stuff and taking opportunities to earn extra. I'm wondering what tomorrow's step will be. Dave's next step after the $1,000 emergency fund is paying off all debt except for the mortgage, after which he places the 3-6 month emergency fund. I'm curious about how The Frugal Dad's approach will differ at this point, since both plans have 7 points.

Day 3: Cut up those credit cards.

I actually did this one a while back. We canceled my card and canceled all the gas cards. But then I was stuck keeping enough cash around to pay for gas, and I don't like carrying around $20 bills. He suggests debit cards as a substitute, but I just don't trust debit cards. I'm afraid of having my checking account emptied and having my own legitimate checks bounce. With a credit card the billing errors can be worked out while I still keep my money in the checking account. I've since gotten a new credit card which is used only for gas and paid off every month. I feel better with this plan.

Dave Ramsey doesn't have the elimination of credit cards as one of his baby steps. It's more of a prequel to the baby steps for him.

Day 4: Slash your expenses.

Frugal Dad offers several specific suggestions:

Gym memberships are usually the first to go.

We've never had gym memberships, so this day is starting out easy.

Consider canceling the cable.

We did this several years ago. So far so good.

Adjust your W-4.

We make quarterly estimates. We do try to be accurate and send the correct amount, but some years we end up paying too much and some years we end up owing. During years when we send too much we just have it applied to the following year's tax estimates. We do not do our taxes ourselves, because we think it's too complicated and we are afraid of making a mistake. "Do right by the IRS" is a motto to live by.

Brown bag it.

We eat out only occasionally. Lunches out are paid for out of personal "allowances". We get a set amount out of each of The Husband's paychecks for personal discretionary spending.

None of these suggestions are radical. In addition to the things he lists we're also doing things like keeping the heat down, switching to fluorescents from traditional incandescent bulbs, using cold water and half the recommended amount of laundry detergent for all our laundry, using half the recommended amount of automatic dish-washing detergent, buying clothes at the Goodwill store, buying some items (toilet paper, paper towels, bar soap, shampoo and conditioner) at Sam's, eating much less meat, increasing the deductible on our car insurance, canceling all our magazine subscriptions, buying books at the local used book store rather than buying books new even for gifts for immediate family since none of us object to receiving used items as gifts...

Day 5: Start saving for retirement.

Saving 15% towards retirement is Dave Ramsey's 4th step, after the baby emergency fund, paying off all debt except for the mortgage and building up a 3-6 month emergency fund.

Frugal Dad makes lots of sense here, of course, suggesting we do the planning it takes to come up with a specific financial goal for retirement, that we take advantage of employer offerings and that we use the Roth IRA.

Day 6: Give the gift of education.

Frugal Dad had several posts over the week-end but none on the 7-Day Turnaround. It looks like the 7-Day Turnaround takes 9 days. (grin)

College funding is Dave Ramsey's 5th step. My first 2 kids got full scholarships, and we're trying to free up enough disposable income so we can cash-flow child #3 at a state school if he is not so fortunate. It's too late for us to have the kind of savings plan for college that Frugal Dad recommends, but we're committed to getting the kids through college without debt.

Day 7: Invest for an early retirement.

Since I'm over 50 and I "retired" for the first time when my first child was born, it's a bit late in time for me to plan ahead for an early retirement. In fact, I'm looking at returning with pleasure to the work force when my youngest goes to college.

Frugal Dad recommends investing outside of retirement accounts, remembering taxes and working towards having monthly expenses covered by investment income.

Dave Ramsey's plan has "Build Wealth and Give" as the 7th step, with nary a mention of retiring early, and his plan is closer to our needs. Because The Husband is a preacher with a love of the ministry, retirement is not the goal it might be for someone whose job is just a way to make money. The Husband's goal is not retirement, though we do realize how important it is to plan for the retirement that will someday be required.

Frugal Dad's plan, as Dave Ramsey's plan did before it, made me realize how obsessed I am with the mortgage. I do seem to live for the mortgage pay-off.

Maxed Out

(This is no longer available online at googlevideo, but you can see the whole thing at Veoh if you're willing to use their player. I'm not.)

I've been hearing about this expose but hadn't seen it yet. I am a regular listener to Dave Ramsey, and there are several clips of him in the film. Maxed Out takes about 90 minutes to showcase the effects of the predatory lending practices of credit card companies. It's tragic. And I'm more convinced every day that our representatives in D.C. are owned lock, stock and barrel by the corporations.

from Wikipedia:

Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders (2006) is an independent feature-length documentary film and book that chronicles abusive practices in the credit card industry. Written and directed by James Scurlock, the film and book use interviews with creditors, debtors, academics, and others to illustrate its story.[1] The film premiered at the South by Southwest Film Festival in Austin, Texas, USA, in 2006 where it claimed the Special Jury Prize. It went on to several film fests including Seattle, Full Frame Documentary, Maui, New Zealand, Milwaukee International, Woodstock, Bergen, Leeds International, Oxford and IDFA (Amsterdam) film festivals. It was released in movie theaters in select cities in the United States in March 2007 through Magnolia Pictures. The DVD was released nationally in June 7, 2007 in the joint effort Magnolia Pictures and Red Envelope Entertainment (a division of Netflix). The book Maxed Out is printed by Scribner, a division of Simon and Schuster.

Scurlock's purpose for the film and book was to raise awareness of how credit and lending issues are affecting society.[1] The main premises of the documentary and book are that banks and other creditors deliberately market to people who are more likely to have problems paying and that the creditors benefit from connections to government, the debt collection industry, and from lawmaker apathy.[2]

The non-profit organization Americans for Fairness in Lending (AFFIL) has organized screenings of Maxed Out around the country as part of its work. AFFIL sustains a formal collaboration with the film.

3/5/2008: My Money Blog has a review.

10/29/2008: The Dancing Image has a review.