2009 was one of the worst financial years in our history since the Great Depression. Many people lost their jobs, lost their life savings in the stock market, and some people even lost their homes. David Bach's new book, Start Over, Finish Rich: 10 Steps to Get You Back on Track in 2010, offers some help and guidance.
Bach begins the book with a story about a woman he meets on the street who read one of his books. She recognized him from the cover and told him she was able to get herself in an amazing position after reading one of his books. "But now," she said, "it's for nothing." Her savings dwindled with the recession and she was barely making it.
David Bach's advice: "Don't give up!" If you do nothing, he writes, it will be the worst mistake ever.
Start Over, Finish Rich delves into the mindsets of average consumers and encourages them to take control of their finances and start over. Through 10 detailed steps, Bach helps consumers regain their finances and offers tips and strategies on how to reorganize for 2010.
I found the book quite readable and it offered some valuable information. Some of the helpful tips offered in the book include:
"FinishRich File System" – Here you take a filing cabinet or a box and make files for all of your personal financial information, including:
- Tax returns
- Retirement accounts
- Social Security statements (I always thought to throw these out!)
- Investment accounts
- Savings and checking accounts
- Household accounts
- Credit card debt
- DOLP (Dead on the Last Payment) account (download the form)
- Credit scores
- Other liabilities
- Family will or trust
- Children's accounts
- "Latte Factor" – This is where you keep track of how much you spend on non-essential items like when you go to Starbucks to buy coffee or if you buy magazines off the stand in the street.
Next Bach talks about how to cut your credit card debt. I know this is an issue for a lot of people and I thought his idea of paying the minimum on all the cards and then an extra payment on one card to try to eliminate debt was quite clever. "Rebuilding Your Emergency Fund" was also an important chapter. It's amazing how things happen when they are least likely to happen and this chapter tries to enforce that we all try to save a little each month by taking automatic payments out.
The "Real Estate" chapter was interesting because prices are relatively low now and the thought of purchasing something with the mindset of it going down is hard to handle. However, Bach suggests that this is the perfect time to invest and buy because prices are low and he says real estate always turns around and goes up.
The "College Fund" section was important too. He suggests the 529 savings plan, which allows you to put away up to $300,000. He suggested that both parents open an account for the children and the grandparents can open one for the children as well.
In Chapter 10, Bach talks about 25 ways to save money, such as:
- Getting rid of your land line and only having a cell phone
- Cutting down on the cable TV packages
- Shopping around for home and car insurance
- Carpooling to work
- Bringing lunch to work and saving $2250 a year
- Lastly, he says, stop buying lotto tickets! American's spend 57 billion on lotto tickets and if each person stopped, they could save $500 a year!
Start Over, Finish Rich ends with a story. This time the story was about David Bach, his divorce, and personal finances. It really captured my attention and made me walk away from the book feeling empowered.