Make Money Not Excuses Review: Saving and Investing
For the foreseeable future, every Friday afternoon I will be reviewing a section of Jean Chatzky’s Make Money Not Excuses and how it relates to me and my financial situation and outlook. The first review is here, Chapter 1 is here, Chapter 2 is here, Chapters 3, 4, and 5 are here, and Chapter 6 is here.
Chapters 7 and 8 talk about saving and investing. Many people are intimidated to start doing one or the other or both, or simply can’t find the motivation to start, even if they want to. I know this rang true for me - as an adult, saving was always something I was going to do “in the future”. There was always something on the horizon that once I just got past that, I would start saving. Same with paying down debt actually, it was just never the right time.
Which doesn’t work, as we all probably know. If you’re constantly waiting for the perfect time to learn about saving or investing, or just to start saving or investing, you’ll never start. Life happens, and it will never be the perfect time. That being said, there are a number of points from the two chapters I’d like to highlight.
In the saving chapter, Chatzky has 5 Steps to Saving More listed, which are basic concepts but I really think summarize the path to a saving mindset - which is the basis of becoming an effective saver:
- Eyes on the Prize (specific goal and plan)
- Know What’s Coming In
- Know What’s Going Out
- Make Changes (reduce unnecessary expenses)
- Automate To Force Your Own Hand
Basically, quantify what you are saving for, how long you have, and what you’ll need, and then figure out where you really are financially. Only then can you really make meaningful changes to bolster those goals. Once you have, and this is what I have yet to do, automate savings so that you can’t sabotage yourself.
I also really liked the section in the saving chapter that talks about why savers stay out of debt and non-savers don’t. Everyone thinks they are the exception, but Chatzky breaks down some numbers and shows how fast the money can add up if you’re not paying credit card bills and interest. And I have seen that for myself - once we eliminated our credit card debt, it really felt like we had more money available to be able to attack the student loan. On paper our expenses and income are still too close for comfort (and to meet our eventual savings goals) but it really does feel like we can make even faster progress now. As I’ve stated before, going into more debt if we have an emergency just is our last resort option now - we want to progress forward, not backwards.
In the investing chapter, the reasons one doesn’t invest really rang true for me, especially the last two:
- Investing bores you
- Numbers make your eyes glaze over
- You don’t speak the language
- You’re scared
The problem is, if you let fear or intimidation control your actions, you end up making an even bigger mistake. We want to retire, and saving alone probably isn’t going to do enough for us. We need to invest so that we can have a future at least as good as the present we have. So what do we do? Start. Dip your tow in the water, as Chatzky says later in the chapter, and start investing. Chatzky also has a lot of tips on asset allocation, different investment vehicles, and other specifics, but I feel like the core advice is something that we’ve all heard but need to hear again and again until we actually start listening to it - begin. The chapter as a whole is a good read just to become familiar with investing terminology and start feeling like it’s all more familiar. Familiarity will eventually lead to comfort, which leads to actually doing something.
Which brings us to the next chapter - I’m Too Old - It’s Too Late For Me. Come back next week for ideas on what to do if you feel like you’re too old to start. I’ll give you a hint - you’re not. 
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