Friday, May 14, 2010
Book Review: Money Answer Book
"Personal finance is 80% behavior and only 20% head knowledge" according to the quote on the back of the book. The Money Answer Book by Dave Ramsey helps you gain the 20% knowledge and helps you work on your 80% behavior so you can straighten out your finances. It's a small book, 170 pages, which is formatted in short, bite-sized question and answer sections, and very easy to read language. Taking care of money isn't hard, but you do have to be willing to make the effort.
It is a good beginner book for people who haven't focused on their finances, and need to start from the basics. He creates guiding principles that should work for most people, so that there is a framework upon which to base your financial actions. The rest of the chapters contain more details, even though there isn't in depth detail on any particular topic.
Since the book is for everyone, and not customized it to the individual, it does have some advice that might not be as sound for each person. For example, he says to pay off your smallest debt first. This way there is a win, and you can see progress. Personally, I don't need the small win, and paying off the highest interest rate loan would pay off all the debt faster. Some people are able to see the long term effects (and are geeky enough to create spreadsheets to see how many months they are shaving off the loan.) But paying off debt is a good thing, no matter the order, and depending on the size of your small loan, having one less debt to keep track of could help too, especially if it prevents the possibility of another late fee.
This would be a good book to gift to a newly married couple, or to a young person just starting out life on their own. Even if they don't read the whole book, they could get enough questions answered without having to admit to anyone that they don't know something.
I got the book for free from Thomas Nelson publishers in exchange for an unbiased review.