Getting control of your finances is a common resolution at this time of year, especially for those of us now facing the bills from the holiday season. In 7 Money Rules for Life: How to Take Control of Your Financial Future, Mary Hunt, founder of Debt-Proof Living, offers a common-sense plan for cleaning up a financial mess as well as planning for the future.
Drawing on her own experience, Mary shows how to get out of debt, prioritize where your money is going, and be prepared for the unexpected. Her approach boils down to seven simple rules:
- Spend less than you earn.
- Save for the future.
- Give some away.
- Anticipate your irregular expenses.
- Tell your money where to go.
- Manage your credit.
- Borrow only what you know you can repay.
They seem self-explanatory, I know, but how many of us know these things and still have trouble following through on them in our own financial lives? After briefly sharing her personal story and her philosophy of money management, Mary walks us through the specifics of implementing each money rule.
My favorite practical tip of hers is the formula 10-10-80, meaning simply that you save 10% of your income, give 10% of your income, and live on the other 80%. Out of the 80%, you also learn how to set aside money for expenses that aren’t fixed monthly amounts, such as annual insurance premiums or car repairs, through what she calls the Freedom Account.
For those facing large amounts of debt or even more serious credit issues, she gives a thorough explanation of how to understand and manage your credit report and walks us through how she evaluates debt before committing to any. I will admit that I think she is too lenient in her allowance for future debt, although she does provide some good guidelines for minimizing your risk if you do need to borrow money. She also spends several chapters at the end of the book explaining how to pay down debt more quickly.
If you have wanted to get control of your finances but haven’t found a way that works for you, 7 Money Rules for Life offers a simple but effective plan that will help you get things turned around in the right direction.
Trish is a self-proclaimed nerd who enjoys balancing her checkbook but can always use a bit of encouragement to keep her money moving in the right direction. She thanks Bethany House for the review copy of this book. You can find Trish blogging at In So Many Words.
The Avid Reader says
Sounds like good advice! I’m in the process of paying off some debt, and I really wish I’d followed these principles instead of accruing that debt! I’ll definitely be far more careful with my money in the future.
I know how it feels to wish you could back and tell your younger self what to do with money (and other things as well)!
Good luck to you!!