Tuesday, November 4th, 2008
Sharon Harvey Rosenberg, known as The Frugal Duchess, has written a book called The Frugal Duchess: How To Live Well and Save Money and is doing a virtual book tour to promote it. She asked if I could be one of her tour stops and I happily accepted. What follows is a guest post from her that is a short excerpt from the book. Enjoy!
How the Depression Shaped My Life.
The Depression Era provides a central backdrop for The Frugal Duchess: How to Live Well and Save Money. The book is really a memoir — family stories – with tips about saving money. In both elements of the book – the narrative and the how-to sections – lessons from the Depression Era provide material. Here’s a short excerpt from the book.
“The twin forces of Depression Era-thriftiness and the product-driven prosperity of the Baby Boom years were my childhood companions. In fact, I am the Frugal Duchess because my parents — born in 1932 (Dad) and 1936 (Mom) — were children during the largest economic downturn in U.S. history and became parents during one of the greatest wealth-generating eras of our country.
On the one-hand, my parents were very frugal, but they also gave us so much: Disneyworld vacations, Happy Birthday parties and Broadway Play dates in Manhattan. In short, I have always felt like royalty — call me Duchess — because I have had two childhoods: my own and the dream childhood that my parents never had, including school years laced with new shoes.
Straight-from-the box footwear was in short supply during my parents’ childhood. On a farm in Virginia, for example, my father spent one summer without shoes when his elderly caregiver –a great aunt who was half blind — mistakenly purchased two left shoes for my dad. The store was far from their rural home and so my father wore two left shoes. But most of the time — especially in the summer — he ran around in his bare feet.
On the streets of Philadelphia, my mother had shoes, but they were old and repeatedly repaired by her father Frank Stephens, a Philadelphia-based tailor and shoe cobbler. My grandfather, a short bald man who looked like a brown china man, was talented with a needles, cloth and leather and had a famous clientele of black entertainers such as Pearl Bailey, local politicians and some Philly mobsters, according to family tales.
His clients appreciated my grandpop’s repair skills, but my mother simply wished for shoes that weren’t fixed over and over again with hot glue and leather. But from her shoes my mother learned the value of carefully preserving and maintaining possessions. And to this day my parents’ garage is filled with well-preserved books, photos and family papers.
My mom and her brother — my Uncle Frankie — also inherited a bit of Grandpop’s skills and crafts. And they spent a lot of time making up games and earning extra pocket money.
“I was always enterprising. I sold carnations on the street for Mother’s Day,” my mother has told me.
Friday, June 20th, 2008
A few months ago, I was sent a review copy of two books by Don Silver: A Parent’s Guide to Wills & Trusts: For Grandparents, Too (2nd edition) and the High School Money Book (review forthcoming in a few weeks). I immediately gravitated towards the one for parents, especially since I am not only a parent, but I was in the process of working on a will and guardianship of my children should both my spouse and I pass away suddenly. The idea of a trust seemed something that only wealthy people needed, but a will is something most everyone needs, so the book immediately captured my attention.
Let me start with the fact that this book is not a “how-to” book for you to do it yourself. If anything, this book is designed to encourage you to consult an attorney to create a will and/or trust properly. But that does not mean that there’s nothing else that can be gained by reading this book. Yes, to actually create a document, you’ll need to take another step, and either get some kind of do it yourself kit or consult an attorney who can guide you for your specific situation, but this book helps to bridge that gap and help you to become comfortable with the entire idea of creating a will and/or trust. For me, just becoming more comfortable with the idea and the vocabulary was the biggest benefit of this book.
Some highlights for me from the book as a whole include the five ways this book can help you – not only did it help me become more comfortable with the topic, as the book suggests, but it also gave me a better idea what happens if you do no estate planning (and it isn’t pretty). The book also helped me understand that trusts are not just for the rich – that many people can benefit from setting up a trust and that their beneficiaries may end up with more of their inheritance (instead of it going to taxes) if done right. Also – beneficiary designations on policies have a life outside your will – if you designate someone as a beneficiary that most likely overrides what you have in your will for that policy (so keep those beneficiaries up to date!).
Although for any specific situation, you are advised to discuss details with an attorney, the book gives many examples of diverse situations from how to prevent lawsuits or contesting of your will, designing special arrangements between spouses if you don’t want to be each other’s beneficiary, how to deal with co-ownership of assets, and a number of other specific and special situations. This gives you an idea of the complexity involved in making your wishes known and insuring they are carried out, but also comfortable with the idea that you can have your wishes carried out with the proper preparation.
All in all, if you have been thinking about writing a will but you’ve been procrastinating because it feels completely overwhelming and intimidating, or you want to feel more comfortable with legal terms and the ideas you need to think about to have your wishes carried out, I’d recommend giving this book a read. I found the writing style engaging and easy to read, and the design of the book in small segments and short questions and answers was very easy to pick up, read a bit, and put down when needed.
Friday, May 30th, 2008
This is the final review 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, Chapter 6 is here, Chapters 7 and 8 are here, and Chapters 9 and 10 are here.
Overall, I would recommend giving Make Money Not Excuses a read, especially if you’re looking for some quick bits of motivational and actionable advice. For me, that was the biggest benefit to reading the book – not the specific topics (although they were all good) as much as the bite-sized format and the way the pieces were presented. Everything was written in a way that encouraged change without belitting your reasons for not changing until now. In fact, as I mentioned previously, I actually was motivated to do a few things in the process of reading the book, most notably sorting through old CDs and putting a large portion of them aside to get rid of. And I actually did sell a number of them at our last yard sale, so I followed through with that action.
For me, this is a book I think I will keep on the shelf under my night table and randomly open up and read a chapter or a segment when I’m feeling in the need of some positive action. I think the format will really encourage me to get re-energized and re-motivated when I feel stuck. The tone is encouraging without being preachy but also has just the right blend of “get up and take action” mixed in. If you want to read a lighthearted book that gives you some motivational techniques to get going on things you’ve been putting off, this book in my opinion is worth a read.
Friday, May 23rd, 2008
This is the penultimate review 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, Chapter 6 is here, and Chapters 7 and 8 are here. Next week will be the final overall review.
Is there such a thing as too old to even start saving for retirement? Is it too late for me? How about all those things we just don’t want to think about – like death, divorce, and disability? Sometimes it feels like things are better just not thinking about them. There’s nothing we can do about them, after all, and if we just don’t think about them, maybe they won’t happen.
But the truth is, of course, that not thinking about things doesn’t make them not happen – it just makes us very unprepared for them when they do.
Chatzky admits that the idea of saving can be overwhelming, especially when you haven’t been a saver before and you feel like there’s not enough time left to make a difference. I know I’ve felt that way myself and I’m only 34 – I bemoan the time gone by and feel like time is just slipping through my fingers and nothing I can do will make a difference. I think it is a by-product of how we try to encourage people to start saving young. Sometimes we feel like if we didn’t start saving in our twenties, then, what’s the point?
But the truth is that it is not too late. Yes, it will be more difficult but the longer you keep waiting to start – the more difficult it will become. Older savers have other reasons to be optimistic, including that you may be in your prime earning years, and your kids may be grown (giving you more money available to save). Also – old age isn’t what it used to be! Many people don’t completely retire, but work part time from 65 onward, because they want to. Chatzky says to repeat to ourselves – it’s not too late, it’s not too late – and then take action. There are a number of strategies in the book on how to take action once you’re ready, but to me the most important idea is to just DO it. I think that is where a lot of us get hung up – once we start doing something, we can move forward but the inertia to starting itself can be almost crippling. Don’t delay! Make a move now.
The last chapter deals with all the things we don’t want to think about, and reminds us of course that not thinking about them doesn’t stop them from happening. This chapter focuses on putting a protection plan in place – a will, a living will. a health care proxy, durable power of attorney for finances, health insurance, life insurance, disability insurance, and a prenuptual agreement. For me, there are a number of things on the list I’ve done well, a few I don’t even know what it is, and one I didn’t need (the prenuptual agreement). I have a long way to go though to be as prepared as I need to be. So I should take my own and Chatzky’s advice and start… now.
Next week I’ll give my final thoughts on the book as a whole and start my own action plan – I’ve got so many things I need to start and hopefully I can manage to make progress on a few of them before my last post on this book. Now there’s some motivation, tell the internet you’re going to.
Friday, May 16th, 2008
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.