Why I read it? In December, Rob Victor and I hosted a financial workshop for young professionals. As recent college graduates, most of them had read & recommended this book, so I wanted to check it out.
What is it about? You Need a Budget is a simple guide to personal budgeting. It outlines 4 rules:
Assign each dollar you earn a description of how it will be used.
Embrace your true expenses and far-off dreams.
Roll with the Punches: When the unexpected comes up, pull from lower priority items.
Age your money: Don’t live paycheck to paycheck.
A budget doesn’t have to be stressful – it’s meant to reduce the stress associated with financial decisions by knowing that you’ve planned for them, and consistently following these rules makes planning effective.
What caused me to pause? The book explained that stress isn’t about the money, but that it comes when we are not sure that our money decisions are aligned with the life we want to live. The book’s focus on planning resonated with me because our firm specializes in it. We always start with a plan and a roadmap for our clients, including “wants” like a new car or a luxury vacation. The book emphasized that these things are okay as long as you budget for them appropriately. You alleviate the stress of wondering “can I afford to do this?” by knowing you can because you planned for it.
How will this book change my habits? I consider my family to be very budgeted. We have the fancy spreadsheet and it goes out a few years. After reading this book, I would like to review our budget annually with my husband so we can both chime in on changes that need to be made and new goals we want to achieve. With a budget you can’t just “set it and forget it” – you must keep revisiting it.
Add this to your reading list if… This is a great book for people who had never really tried to budget before or something big has changed, like graduating from school, getting married, or having a baby. It would also be important for someone who has just retired because of the change in income. This book helps you get on a path to avoid financial stress.