All Your Worth – The Ultimate Lifetime Money Plan
Author: Elizabeth Warren & Amelia Warren Tyagi
The book introduces the idea of “balance” when it comes to managing money for your lifetime. Whether it is money to pay rent or going on vacation or retiring to an island. The key to achieving your financial goals is to have the right balance.
The 6 Steps to a Lifetime of Riches:
1. Count All Your Worth
All your worth balances your money into 3 categories: Must-Haves, Savings, Wants. Any issue you may have with your money stems from these 3 things being out of balance. It is similar idea to the “50-20-30” budgeting principle, but approaching it from different perspective.
2. Escape from the Thinking Traps
We all make excuses about why we can’t save or don’t have enough money. Believe in yourself and try to fight the negative voice in your head. It only matters that you make incremental progress toward bringing your money into balance today.
3. Count the Dollars, Not the Pennies
If you are trying to save money try setting a goal, cutting where it is easy first. Then look at the “bigger” items where it would hurt a little such as insurance, rent, cars. If all else fails to bring your money into balance then consider more drastic cut in the end. By reducing large expense categories in your budget you are
4. If You Can’t Afford Fun, You Can’t Afford Your Life
Having money is not about what you spend but how you spend. Try to avoid being attempted on spending outside of your Wants money. It is fun to spend if you know you can afford it.
5. To Build Your Future, Pay Off Your Past
Pay off debts so you can work on building your future financial freedom.
6. Build Your Dreams a Little at a Time
Lifetime saving plan:
Stage 1: Save $1000
Stage 2: Pay off steal-from-tomorrow debt
Stage 3: Build a 6-month security fund
Stage 4: Lifetime of wealth creation (save for retirement, pay off the house, save for your other dreams)
Love and Money
Money is a thorny subject and many relationship suffers if money is not discussed between couple. Try to think from the other person’s perspective and focus on changing your own money habits first. Don’t nag your significant other. Think of small steps to help them see your perspective and if they cannot change remember why you love them and how they are better at other things in your relationship.
Financial CPR (including bankruptcy)
Stay in control and react quickly at first sign of financial problem. Choose bankruptcy with care (both chapter 7 and 13). It could have long-lasting impact to your financial future however it would be the ultimate way to reset your financial woes and provide you a clean slate to start over.