A former co-worker of mine used to throw all her bills in a pile and pay them whenever she had extra money – her idea of personal finance savvy was pulling from the bottom of the pile in order to pay the most overdue bills first. While it’s easy to shake our heads at such ghastly money decisions, most of us are still making our own financial blunders. Two new books from The Wall Street Journal aim to get us on the right track.
Authored by Journal financial reporter Jeff Opdyke, The Wall Street Journal Complete Personal Finance Guidebook and The Wall Street Journal Personal Finance Workbook are sold separately. However, while each can stand alone, they complement each other. The Complete Personal Finance Guidebook is a primer about the world of personal finance, meant to be read while sitting in a comfy chair. The Personal Finance Workbook, on the other hand, is meant to be written in – your own personal finance story. Shelling out an extra ten bucks to get both wouldn’t be the worst financial decision you’ve ever made.
The Complete Personal Finance Guidebook is 200-plus pages of material, going from the very basic such as savings and checking accounts to more ambitious tasks like setting up a spending plan (basically a budget, but Opdyke suggests the “b” word is too depressing to provide much motivation in creating one, much less sticking to it), shopping for mortgage and auto loans, investing wisely, and planning for retirement (instead of vaguely hoping you’ll have enough money to live out your life without working at Wal-Mart or hitting up your children for funds). If you’re starting from Square One, the Guidebook can certainly help you move from there to Square Two and so on.
While the Guidebook is good information, the Personal Finance Workbook is good motivation – it encourages you to break out a pencil and start writing down hard numbers. The Workbook provides a good amount of the Guidebook’s information in condensed form, and supplements it with forms you fill out to take stock of your own financial story. (The book also directs you to additional forms online in case you need more space or want to work through alternate scenarios.)
Included in the Guidebook are forms for creating budgets and/or “spending plans”, determining how much life insurance to carry (if any), deciding between renting or buying a home, calculating how much home you can afford, estimating how much to put away for children’s college expenses, calculating whether to buy or lease your cars, understanding your investing risk-tolerance, determining asset allocations, calculating how much money you may need in retirement, and more.
While most of us are smarter than to employ my ex co-worker’s bill pile method, it’s hard to know it all, or to keep it straight. These Wall Street Journal guides give you a handy set of tools for understanding personal finance concepts as well as for gauging your financial progress over time.