When we were first married I got a nifty little software called Microsoft Money. In it we could input our purchases and track our spending. I love to be organized and we were trying to save up to buy our first house so it was fun to track all our purchases and watch our savings grow. I kept all my receipts and input the information into the right account. Now, 13 years later I could pull up a file and tell you how much we've spent at McDonald's or what we've spent on car maintenance. It takes some work each month to put in all the files and reconcile the balances but I think we'd be lost financially if we didn't keep track of things. There is a lot of freedom in knowing where your money is going.
After reading Debt-Proof Living, I realized that tracking spending is not something that most people do. I didn't realize that just knowing where your money goes is one of the biggest things you can do to stay out of debt. She also had some surprising tips for staying out of debt including making giving and saving priorities, even before you are out of debt. She recommends living off 80% of your income and using 10% towards savings and 10% for giving away. To some that might seem crazy to give money away if you owe it to others but she said that giving money to a charitable cause helps you to get a better perspective on your money and not just to use it all up. She says that saving 10% of your income is necessary even before you are out of debt to insure against unforeseen future expenses instead of just relying on credit cards or loans.
This book does give a concrete plan for getting out of debt but also a whole new way to look at finances. I didn't get as much out of it as I'd hoped and some of the advice she gave was counter to what I do, but overall I thought it was a good book for someone who needs the steps to help get and stay out of debt.
I received a copy of this book through the Revell Blogger Review
Program, in exchange for my honest review. All opinions are my own.