(Thanks to Suburban Dollar for including this post in the Carnival of Personal Finance!)
Well, my Bargaineering Bucks were burning a virtual hole in my electronic pseudo bank account, so I bid on Gregory Karp’s The 1-2-3 Money Plan: The Three Most Important Steps to Saving and Spending Smart, and won the auction.
I was impressed with the book. It covers a broad variety of financial topics, including estate planning, discretionary spending, banking, insurance, telecom expenses, how to buy used things, saving for college, and more. As the book title suggests, each topic is boiled down to its three most important takeaways. Even the whole book is organized this way:
- Spending Smart Yesterday (paying off debt)
- Spending Smart Today (spending smarter on current expenses)
- Spending Smart Tomorrow (saving for later)
What impressed me about the book the most, though, is that Mr. Karp didn’t shy away from giving specific recommendations. He names mutual fund companies. He gives website addresses. He recommends online bank accounts. These specific recommendations make it easy to take action immediately. He fully admits that the advice he gives isn’t perfect for everyone, but he does claim (and I agree) that it’s very good advice for most people. And that’s about all one can hope for a broad-audience financial book, anyway. Beyond that, a financial planner is necessary (he even talks about that subject!) because only they will be able to see what you actually have and what you actually need.
In line with the theme of the book, I’ll give three things from the book that caught my attention:
- Credit fraud alerts aren’t foolproof, mainly for the reason that not all lenders actually check for them when someone applies for a loan.
- You can make a target-date college or retirement portfolio more or less aggressive by changing the target date. These kinds of plans start “aggressive” (mostly equities) and move toward “conservative” (bonds or cash) as the target date is approached. Making the target date earlier makes the portfolio more conservative; making it later makes it more aggressive.
- The average fee on an interest-bearing checking account is almost $12, according to a 2008 BankRate.com survey. That floored me. Makes me very thankful for my credit union.
There’s a lot of very good advice in the book, and certainly good advice that can be put into action immediately. I recommend Gregory Karp’s The 1-2-3 Money Plan: The Three Most Important Steps to Saving and Spending Smart.