Archive for January, 2010

5 Smart Books: A Reading Rally

Monday, January 25th, 2010
SmartMedia by Robert J. Hughes

5 Smart Books: A Reading Rally

Wealth Watchers

A Simple Program to Help You Spend Less and Save More

 

Wealth Watchers Book CoverBy Alice Wood
Free Press; $19.95
Reviewed by Robert J. Hughes

Author Alice Wood’s concept of wealth-watching was borne out of her own resolve following a freak head injury she sustained on a commercial air flight. She found herself having to learn simple things over again – like handling finances – and decided to create Wealth Watchers, to look at each penny she spent, modeled after the Weight Watchers concept of tracking every nibble.

And like the time-tested Weight Watchers plan, in Wealth Watchers people take personal responsibility for their spending – knowing one’s credit score, arranging the best way to pay bills, for example. Wood’s book includes sample charts that help clarify points, such as 15- or 30-year costs for a $150,000 fixed-rate mortgage, including monthly payments and interest. Wood also includes compelling anecdotes about how some people have spent less, including that of a woman who resolved to spend no more than $50 per week feeding her family of four, and managed over the course of a decade to save $78,000. “I trained myself to shop carefully, so today it is actually difficult to spend a lot of money,” the woman says.

The ideas are basic, but that doesn’t mean they won’t work: get organized, create a monthly budget (so few people do this), keep a spending journal (akin to a food diary) to track where the money goes. The book also has a journal area at the back – write directly on the pages or create one modeled after the format here – that should help clarify one’s cost-conscious way of financial dieting.

Click here for the full article.

Books by Quinn, Farrell and Wood aim to improve people’s money managing habits

Sunday, January 24th, 2010

Book World
Books by Quinn, Farrell and Wood aim to improve people’s money managing habits 

<em srcset=MAKING the MOST of YOUR MONEY NOW Book Cover” width=”228″ height=”351″ />

By Martha Hamilton
Special to The Washington Post
Sunday, January 24, 2010
 

MAKING THE MOST OF YOUR MONEY NOW

By Jane Bryant Quinn

Simon & Schuster. 1207 pp. $35

Scared silly by the Great Recession and thinking about changing the way you handle money? That seems to be what the authors of three new books are hoping to take advantage of — improving people’s habits before our attention moves on.

Of the three, the best and most comprehensive is the new version of Jane Bryant Quinn’s “Making the Most of Your Money Now” (Simon & Schuster). I found myself racing through this gigantic compendium because it was engagingly written and full of useful information. And she writes compellingly enough to make you want to spend more time getting things in order. I swear I would have followed the advice about getting financial and health-care powers of attorney on page 30, except I had more than 1,000 pages ahead of me.

The book is organized around eight steps, which she takes you through in detail in multiple chapters. The first, “Building Your Base,” includes chapters about the right way to keep records; finding the right bank in the Internet age; and “Twelve Checklists for Life’s Milestones,” which includes what you need to keep in mind if you are having a baby, facing a divorce or think you might be laid off. “Step Six: Understanding Investing” is nearly 300 pages about stocks, bonds and mutual funds. It also contains warnings about bad investment ideas and information about socially responsible investing as well as the Vice Fund, founded in 2002.

“It revels in global gambling, tobacco, liquor and aerospace/defense,” she writes. “Since its inception, it has performed almost twice as well as the S&P 500.”

I know the length sounds daunting — imagine how I felt when I picked up the paperback proof, which, according to my bathroom scale, weighs 5 pounds — but it is a relatively fast read. And I kept finding the occasional interesting facts, such as Louisiana is the only state that does not allow a parent to disinherit a child.

One other good thing is that for every subject, Quinn refers readers to multiple Web sites with more information. As you might expect in a book of this size, there is substantial repetition, but in most cases, it is warranted. You might have skipped over the divorce checklist, which advises: “Don’t borrow against your house if your marriage isn’t going well.”

Maybe things aren’t going as well as they should be, but you don’t consider yourself a candidate for divorce. Still, it might be useful to read in the chapter on “All the Best Ways to Borrow Money to Invest” that “when you’re married, it takes only one signature to originate a home equity loan. One spouse could borrow up to the limit of the line and spend the money, yet you’re both responsible for the debt.”

(Quinn is a contributing editor to Newsweek, owned by The Washington Post Co.)

As a fan of Chris Farrell’s for his role as economics editor of “Marketplace Money,” I was looking forward to reading his book, but it didn’t pull together. The subtitle of his Bloomsbury Press book, “The New Frugality,” is “How to Consume Less, Save More, and Live Better.” Its genesis seems to be not just the Great Recession but also two personal incidents in Farrell’s life, the death of his father and his scare with colon cancer. Farrell’s father was able to say as death approached, “I’ve lived a good life.” And Farrell’s approach to life and money seems modeled on how his dad lived: “He wasn’t cheap. He wasn’t extravagant. He saved, took calculated risks, provided a home, educated his children, enjoyed his money and gave back to community.”

Another strand ties the way we should live now to sustainability but never gets fully developed. Still, the book is full of information about how to manage money wisely, including a quote from the 15th-century French poet Charles d’Orleans: “It’s very well to be thrifty, but don’t amass a hoard of regrets.”

The book has a lot to like, including the storytelling style and such tips on saving and sustainability as to share books with friends. We’ll see whether he is right that “our love affair with consumer debt is over.”

In “Wealth Watchers” (Free Press, with Glenn Rifkin), Alice Wood has a compelling personal story and a gimmick. Wood worked as an estate planning lawyer before living through a horrifying experience on an airplane — breathing into a faulty oxygen mask, which resulted in serious brain damage. In the wake of the accident, she had trouble managing her work, her weight and her money.

As she began to keep her weight under control through the Weight Watchers program, she had what she describes as a “light bulb” moment, in which she realized that “the solution to both my weight and spending problems lay in the simple, daily discipline of keeping track.”

She takes the reader through the steps of creating a monthly budget, projecting it for the year and dividing disposable income by 365 to get a daily gauge. The book is a good argument for being cheap, the power of small savings multiplied and attentive spending. Like the other books, it has suggestions for saving money, such as getting the first two years of a college education from a community college and substituting experiences with one’s children for material gifts.

I didn’t know till I read it here that www.edmonds.com has information on “true cost to own” for car buyers that factors in depreciation, financing, insurance, taxes and fees, fuel maintenance and repairs. What it is not is a comprehensive financial guide.

And, in the spirit of not spending more than you need to, I should note that the reader is asked to write 126 of its 279 pages in the form of a daily journal. Wouldn’t a one-page model have done?

Martha M. Hamilton writes the Your Financial Future column for AARP Bulletin Today.

Naperville attorney launches Wealth Watchers program

Friday, January 22nd, 2010
 Naperville Sun | January 21, 2010  
 

Alice Wood submitted photo

She’s already convinced corporate heavy hitters like McDonald’s and Visa to embrace her personal finance plan. Now Naperville’s Alice Wood is the author of a new book. “Wealth Watchers: A Simple Program to Help You Spend Less and Save More,” was published Jan. 1 by Free Press, a division of Simon & Schuster.

Wood, an attorney and lifelong Naperville resident, conceived the Wealth Watchers program several years ago after her own finances went into a tailspin.

One key to success, Wood said, is to often avoid thinking about the big picture, which can feel overwhelming. Rather, seek small successes every day.Wealth Watchers is similar to Weight Watchers, in which clients keep track of how many calories they eat in a day or week. By keeping track of spending, it’s easy to calculate the program’s key number: how much you can spend per day without getting into financial trouble.
 
Most people don’t know how much money they have to spend for the rest of the week, or month or year. This blind spot has put many American families in unprecedented personal debt and made savings a distant dream.
 
When a brain injury sustained on a commercial airliner changed her life, Wood encountered many new challenges. For the first time in her life she was overweight and in serious debt. Weight Watchers allowed her to lose the weight and keep it off.
 
Inspired by the Weight Watchers daily discipline of journaling and the principle of group accountability, Wood created a simple program to reclaim her financial stability. The first year that she and her husband kept a daily Wealth Watchers journal they spent $12,000 less than they had the year before. Wealth Watchers is now America’s largest workplace financial literacy program. Visa and McDonald’s have given 500,000 Wealth Watchers journals to employees around the country and on Jan. 1 the city of Chicago also joined the program.“Wealth Watchers” presents the program and principles in full for the first time. Readers will find all the tools they need to organize their finances, complete a monthly budget, determine their disposable income and understand which spending patterns are knocking them off track.
 
At the heart of the program is one simple calculation: your Daily Disposable Income, the money you can spend each day without going into debt. With the second half of the book dedicated to financial journaling, readers are encouraged to record daily spending and to track it against their DDI goal for 12 months.
 
The Wealth Watchers daily tracker is also available as a free iPhone app, where users can easily track spending against their goals and quickly gain access to a bird’s-eye view of spending history.
 
“Wealth Watchers” is the story of Wood’s journey from a life of having it all to a life of dealing with frustrating financial setbacks to creating a personal plan and launching an international financial literacy movement. All from a woman who simply wanted to manage her finances in a way that made sense to her.