Customer Reviews: All Your Worth: The Ultimate Lifetime Money Plan
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on April 1, 2009
All Your WorthWhen most people think of a personal finance book, they think of something similar to All Your Worth. At least it's what I think of: a guide to the emotions and the mechanics of getting your financial life straight in these times.

I first came in contact with this book when I went to the library shortly after my financial meltdown - it was one of about eight or nine books on personal finance that the librarian thrust into my arms. I took it home and devoured it in one sitting, like I did most of the other books I read in that first batch. As with all of the other books I read in that batch, there was one key idea that stuck with me from this book, and that was that the real key to personal financial mastery is balance.

Let's walk through the book so you can see what I mean.

6 Steps To A Lifetime Of Riches

The first half of the book details a six-step plan for getting your finances in order. In general, the advice is pretty standard, but there are a few interesting twists.

Step One: Count All Your Worth
The goal of this chapter is to do a complete financial accounting of where you are at, separating the money into three groups: must-haves, wants, and savings. Warren suggests that a healthy distribution between these three groups is 50% must-haves, 30% wants, and 20% savings - the further away from that balance that you are, the less enjoyable (or at least more stressful) your life likely is, particularly as the must-haves get higher. Instead of giving guidelines about how to get close to those target percentages, though, this section is mostly about calculating the percentages; the advice comes later.

Step Two: Excape from the Thinking Traps
This chapter is very psychological in nature - it deals with overcoming psychological traps to getting your money in shape, such as "But housing is too expensive" or "But I have kids" or "But my wife doesn't work." For the most part, thoughts like these are just excuses to keep you from really whipping your money into shape. If you've got a reason like this that keeps you from really attacking your finances, you should clearly specify what the idea is, think about the goals you want to accomplish, then spend time researching and trying to understand whether the idea is actually preventing you from saving or if you're just using it as a crutch. Face it and take it on - that's the way to get past psychological traps.

Step Three: Count the Dollars, Not the Pennies
This chapter, for me, was one of the highlights of the book as it clearly makes a really important point: a lot of the things that people define as "must-haves" are quite often not really "must-haves." You might be living in a normal house in a normal suburb, driving a normal car, but if the continual payments on these are preventing you from building wealth, then you need to look at making a change in your life. But the neighbors have these things isn't an excuse - likely, your neighbors aren't building wealth, either.

Following the All Your Worth plan, you need to trim your "must-haves" down to half of your take-home, so you might expect lots of frugal living tips. Well, that's not what you get. Instead, it's tips on how to trim big, sustainable pieces from your budget, like reevaluating your insurance, selling your car (or getting a cheaper, more efficient, or more reliable one), refinancing your mortgage, looking for a tenant, and so on. The key here isn't to spend your time clipping a coupon, but to look for things that will save significant money over the long run that can really change the percentage of your paycheck devoted to "must-haves."

Step Four: If You Can't Afford Fun, You Can't Afford Your Life
Here, the sacrifices that are made in the previous chapter pay off. If you get your must-haves down to around 50% and then actually save 20%, that leaves 30% of your income for your wants. That's great! But if you're not careful, spending money can burn you. Thus, the book really advocates setting spending limits and never spending money on wants that you don't already have in cold, hard cash - in other words, no more credit cards. By doing that, you don't make a want into a must-have and thus keep your financial house in order.

Step Five: To Build Your Future, Pay Off Your Past
So, now that you've maneuvered your "must-haves" to roughly 50%, your savings to 20%, and your discretionary spending to about 30%, it's time to look at eliminating your debt. That money comes from the 20% savings portion of your monthly budget - as long as you have significant debt, you should use this 20% to eliminate it in the form of extra payments beyond the "must-have" minimum payments. In fact, All Your Worth actually suggests reducing your savings down to $1,000 to focus on paying off debts (obviously, don't cash in anything that has a significant tax penalty). Once you've got those debts paid off, though, it's time to move onto the final step.

Step Six: Build Your Dreams a Little at a Time
Once you're debt free and have your spending in order, the fun begins to happen. You're now in a position to start socking away 20% of your money. The chapter offers some investment advice, but quite honestly, when you reach this point, you really should pick up a well-written investment book like The Bogleheads' Guide to Investing (read my full review of the book).

Powerful Tools

The second half of the book focuses on three specific topics: relationships and money, buying a home, and planning for emergencies.

Love and Money: Having It All
This is basically a one-chapter compression of David Bach's Smart Couples Finish Rich (read my full review) in that it focuses on many of the rough spots of mixing relationships and money. Most of the time, it comes down to communication, as do most sticky relationship issues.

The Big Buy: Purchasing the Home That Is Right for You
This was a very interesting chapter, because it's one of the few personal finance books I've ever seen that doesn't simply insist that you buy a home as soon as you have that down payment in hand. Basically, the book's advice is that you should live in the cheapest place that's acceptable to you whether it's renting or not in order to minimize that piece of your 50% must-haves, but that if you're renting, you should be saving at least some of the 20% savings for a down payment on a home.

Financial CPR: Protect Yourself When Things Get Tough
The final chapter is one of the most important ones in the book: how do you handle an unmitigated financial disaster, such as a life-threatening illness or the loss of primary employment? A ton of good suggestions are offered here, the best one being know at all times what wants you could cut and even what must-haves you could cut and review that list regularly. There's also suggestions on progressively worse situations: talk to and negotiate with your creditors and, if all else fails, consider bankruptcy. This section is handled with great care and maturity and was one of the real highlights of the book for me.

Buy or Don't Buy?

I enjoyed the book quite a bit: it was very realistic and down-to-earth without feeling overly simplistic, either, which makes it appealing to a lot of readers. Buy this book if you're looking for a financial plan that doesn't demand that you cut things to the bone or consider major lifestyle changes.

On the other hand, the fact that this book doesn't really go over re-evaluating your true relationship with money in your life is also a weakness, and that's why I would really recommend reading All Your Worth as a follow-up to the excellent "Your Money or Your Life." Why? All Your Worth is a very, very good book if you already understand the role that money plays in your life, as it provides some guidelines for getting everything together. Your Money or Your Life, on the other hand, focuses on defining and understanding your relationship with money.

I really enjoyed this book and see the power of the information inside of it, but I do worry that it's something like a diet book: it's really easy to fall off the horse unless you've made that key mental commitment first.
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on March 6, 2005
Maybe you work full-time and barely have enough left after all of your bills are paid each month. Or, maybe you're eyebrows-deep in debt and have no idea how to get the balances paid down. The majority of "financial guides" in existence aren't for you - why waste money on a book that tells you how to play the stock market to your advantage when you don't even have a savings account? Why waste your time reading about IRAs and CDs when they're not part of your vocabulary?

"All Your Worth" is the first "money matters" book that gets it right - it speaks to the many individuals and families who struggle to stretch every paycheck. The idiotproof worksheets force you to get honest about your spending habits. The authors' advice is thoughtful, practical and above all, it makes sense. By guiding you through the financial exercises, the authors help you see how your money is divided into three areas - things you must spend money on each month (mortgage, groceries, etc), things you want to spend money on (such as karate lessons, trips to a pricey salon, etc) and a savings portion. By separating your monthly expenses into these areas, the authors help you see how your money is - or isn't - working to its advantage for you.

The authors are speaking to a real audience - people for whom mutual funds and stock options aren't part of the daily vernacular. Warren and Tyagi are providing real advice for real people. They aren't promising to make you a millionaire - rather, they are providing solid advice to get you back on track, to stop worrying about whether a $35 haircut will cause your utility check to bounce and to get in charge of your finances.
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on March 6, 2005
I'll admit it. This book changed my life. Corny, I know. But it's true. I used to be horrible about paying my bills. I make decent money, but I was always late on every payment. My problem was that I was never quite sure what I could afford. If I pay the cable bill now, will I still have enough money to go out this weekend? Will my next paycheck clear before my rent check is cashed? I'm 28 years old, how much should I put into my 401(k)? Do I even need a 401(k)?

Warren and Tyagi's book changed all that in a weekend. Their core idea is so simple, but when you put it into action, it is incredibly powerful. Basically, they say that in order to address all of your financial worries, you just need to put your money in balance. They have just three categories, Must-Haves, Wants, and Savings, and every dollar you make goes into one of these categories. For me, that means that I just take my paycheck to the ATM and spilt it up as I make my deposit. I put half into my checking account. Transfer 20% into my savings account. And the rest I take out in cash.

What's so cool about dividing my money this way is that I never have to worry about bouncing a check. I know that there is always enough money to cover my bills because I only use my checking account to pay my bills. As for going out on the weekend, I have cash in my wallet and I just use that.

Getting used to their system is a little awkward. I found myself going through a lot of my expenses asking is this a Want or a Must-Have? And the authors spend a long time blasting the credit card companies and credit card debt in general. They make Citicorp seem worse than Big Tobacco and Microsoft combined. But once I got my money into balance and started using cash to buy dvd's and go out to dinner, my day-to-day life got a lot less complicated. For the first time in my life I don't know to the penny how much I have in my checking account. I don't know which checks have cleared and which haven't. And I don't care. Thanks to Warren and Tyagi's book, I do know that there will always be enough money in my account to cover bills. And that's all that matters.
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on January 22, 2007
I highly recommend this book to anyone who finds that they just scraping by each month.

The reviewers who complained that the 50/30/20 plan is unrealistic simply missed the point. Yes, it's very difficult to squeeze a budget into this framework. Yes, it's sometimes downright impossible to get down to 50/30/20. However, 50/30/20 is goal, just like aiming for cholesterol intake. A 65/25/10 budget is still a whole lot better than a 80/20 budget--or worse--a 70/35/0 budget (yeah, spending more than you earn...lots of us do this).

By balancing your money--and the authors walk you through this process--you can focus your energy on the big ticket items and stop sweating over whether to buy Cherrios or generic "Tastee-Os" at the supermarket. If you find that a new purchase, like a car, a computer, a house, et al, will change your ratio for the worst, then you will know that's a big red flag. Finally, you will have the answer to "Can I afford it?", and you won't need to call Suze Orman every time you need to make a purchasing decision.

So if you're living in Silicon Valley (we lived in Orange County, CA, so I understand), like one of the unhappy critics, then start your budget where it is. (Even if its 70/20/5) Use the balance plan to influence your future purchasing decisions and to evaluate your spending history.

For the record, I am a stay-at-home wife/mom in my twenties, and our family of three lives on a Marine Corps seargent's salary. We have 20% of our income going towards savings. Two years ago, I was bringing home an additional $45,000/year, and we had $5,000 (+/-) of persistant credit card debt and auto loans, etc. We didn't even have our kid yet. Eek! Now, we have ZERO debt, growing savings, a retirement plan, and extra money for the fun stuff. Crazy, huh?
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on March 6, 2005
So I guess you could call me the typical just out of college person. I have my first "real" job, don't make much money, and was completely suckered by offers of free credit cards in college. I had pretty much given up on ever getting out of debt until I was ready to retire or hit the lottery. Then I got this book, desperate for ANY advice that would help me get rid of those ridiculous credit cards. And it has!!! Not only do I have a plan to be out of debt by the summer (COMPLETELY out of debt, I have to add), but I still have enough money every month to go out with my friends, go to the movies, or splurge on a few books. I never had much financial advice before and math is not my strong suit, but this book was so easy to follow, fun to read, and took so little time to set up my finances according to their plan. I can say with utter confidence that I know exactly where I stand financially at every moment of the day, and it's an unbelievable feeling. I've already started making plans to start saving for a house and a retirement plan! Every twenty-something starting out NEEDS this book!!
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on April 13, 2005
This book has placed before me a plan that I can stick to. Along with Suze Orman's The Money Book for the Young, Fabulous and Broke, I'm slowly getting my life in order. Warren and Tyagi gave me "permission" to keep 30% of my check for me, for whatever I want. That makes all the difference in the world. I'd look at my credit card balances and think that I couldn't keep that much of my check, I needed to pay them off. But I'd hold off, thinking "what if" thoughts. What if my car blows a tire, what if my dog has to go to the vet . . . and then by the end of the month, the extra few hundred was gone because I'd see it in the bank and think, well $30 here and $20 there, I'm not spending much. But I was. Their method gave me enough money so that I didn't feel broke, but left enough in the account to pay my bills and give a good extra chunk to the credit card demons. Yes, it's common sense stuff, as one reviewer put it, but most people do not use common sense with their money. Why else would the average credit card debt in the USA be around $8000 per household? With credit cards and mortgage companies giving you more credit than you can handle, it's no wonder we think we have more money than we really do.

But, I digress. This book has good, solid advice for those, like me, who can't seem to make their debts smaller and their savings larger. Some of us need a plan. And now my card balances are shrinking. I'm estimating that in a year and a half I can start contributing to my very own Roth IRA. Maybe even invest in some mutual funds. Between this book and Orman's, I'm using lingo that I'd only ever wondered at before.

So, if you want to make sure that all the bills get paid every month and that you still have money for movies and outings and silly things you love, get this book. If you need a guide to investing and prioritizing, get Orman's book. Heck, get them both. They are WORTH it.
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Authors Elizabeth Warren of Harvard Law School's faculty and her daughter Amelia Warren Tyagi, a Wharton School of Business graduate, veer away from the usual save-your-pennies, clip-your-coupons genre of financial advice. They are less interested in teaching you how to pinch pennies than in showing you insightful ways to reclaim your life from your creditors and establish a sense of financial well-being. In fact, they warn that penny-pinching can be a dangerous distraction. The solution to out-of-control debt, they say, is a balanced approach, which begins by trimming the big-ticket budget busters that are devouring your income. The authors go beyond soft anecdotes and generalities to delineate specific tactics for plugging the holes in your finances, supported by diagnostic tests for readers. Occasionally their writing style is awkward - such as when they relate first-person anecdotes by specifying in parentheses which author is telling the story - but the book is otherwise lucid. The content reflects extensive, resourceful research. Best of all, the authors are realistic and don't promise any quick fixes. We strongly recommend this volume to anyone who needs financial guidance - and considering that U.S. banks alone will earn more than $100 billion this year in credit card interest, fees and other charges, that should include plenty of readers.
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on February 22, 2007
This is one of the most useful books I've ever read. This book is not about high finances. There may be many small details that you may disagree about but that is not the point of this book. The great thing about All Your Worth is that it changes how you THINK about money. It offers ways out from your "negative thinking traps" that are the real reason why you have gotten into money troubles in the first place. And in addition, this book gives a simple fool-proof formula that you can follow. You can stop worrying about "am I saving enough for the future", "am I spending too much money on clothes" and "am I paying too much for my house". This book will give you clear answers for those questions. There are countless practical tips that have come very useful in our household. After reading All Your Worth and doing the excercises I finally feel in control of my money for the first time in my life (I'm 32). Even if you don't live in the U.S., most of the advice in this book is still valid although if you live in the Nordic countries like I do then the section about health insurance is not accurate. Still, a vast majority about the advice is universally applicable. Language will not be a problem either, it's written in simple language so you don't have to be a native English speaking person to understand it.
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on September 8, 2005
I've been reading about two books about financingI've read probably over a dozen finance books and this one is my favorite without a doubt. The book breaks down 50% on must haves, 30% on wants/fun stuff, and 20% on savings/future. The majority of books I've read were about a certain subject like mutual funds, real estate or some motivational book, but this book really has a plan. Years ago they said to save 10%, because pension plans weren't being cut and social security wasn't a mess, but now every financial expert I know says save 20%. The problem is that we really don't know how much we can afford, most people will say I have X amount of dollars in the bank I can afford a new car, a bigger house, but at what expense.

The great thing about this book is that for you to enjoy your quality of life you have to have some spending money on fun stuff (30%). The problem is that the majority of people either spend money on must haves or fun stuff, personally after doing my calculations on excel and savings it for future reference I noticed that my must haves were really too high, which will either take away from my savings or my fun money, which it took away from both. The balance of this formula is great, it shows that if you are too high in the must haves that you won't save as much for the future or you won't have enough money to go out and enjoy life. If you spend too much on going out you won't have the money for must haves like a house that you own. The balance formula is a great formula and it really makes sense and it's going to take me some time to get on a better formula, but at least I know what's lacking and what's taking up my time.

The section save the dollars not the pennies is a great section and it explains that you should look at big things like the must haves that are killing the funds and then small stuff, most people look at small stuff first. I'll tell you from reading that section I'm saving over 215 dollars a year on life insurance and 200 dollars on home insurance a year. 415 dollars a year savings might not be that much, but it's a lot to me when my qualify of life hasn't change what so ever. As a matter of fact I think I have better insurance coverage now with a better company.

I cannot say enough good things about this book and not just that the authors are awesome. I emailed Elizabeth Warren with a few questions about the book that I wasn't 100% sure about and she replied to my email right away. This is a person that's not just trying to get rich off a book, but really enjoys educating people. I haven't read the book the two parent income trap that they first published, but I'll tell you after reading this book it's without a doubt going to be one of the next books on my list.
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There's a lot of great information in this book geared toward twenty-somethings and the pitfalls of student loans and low interest credit cards. As a parent of a kid who is just five years away from starting college I found the information very valuable. It seems that investigating student loans and financial assistance is going to be every bit as an important decision as which college to attend.

The best advice books come down to common sense. Things and methods that are often so obvious that they are overlooked. Despite what it says there are some quick-fixes but those quick-fixes don't have to be only short-term fixes. This book is not all about paying your bills and saving for the future. The Warrens know how very important it is to have "fun money" to use for entertainment and their guide helps you plan not only for savings, but also to have that money to go out to eat, or buy DVD's, etc. In it's simplest form "All Your Worth" is about categorizing things into things that are "must haves" like your bills, and things that you "Want" say for fun.

This book isn't one of those that you need to make a lot of money in order to be useful. This book is about taking your current financial situation and turning it around to your advantage and escaping your debts...ESPECIALLY credit card debts. This is real advice for real, hard-wroking, middle-class people.
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