25 September 2008
Book Review: Spend Well, Live Rich
Spend Well, Live Rich
By: Michelle Singletary
I heard Michelle Singletary on the radio about 3 years ago and was intrigued by her perspective. Like always, I wrote down the information for her book and proceeded to lose it, so imagine my surprise when I noticed it at the library.
Quit spending so much!
1) Very candid
2) Good starting point for beginners
3) I found a McDonald’s receipt in the frugality section…hehe
4) I liked the following forms (as shown below): Sample allowance agreement, sample rental agreement (for family members or friends that stay with you), and sample loan agreement. If JuJe needs to live with us in the future, I will certainly whip this out for some tips on how to handle it before things get out of hand.
Part one: Seven money mantras to guide you to financial serenity
1. If it’s on your a**, it’s not an asset.
2. Is this a need or a want?
3. Sweat the small stuff
4. Cash is better than credit
5. Keep it simple
6. Priorities lead to prosperity
7. Enough is enough
In this section, she gives Christmas ideas that I appreciate. She mentions having a $100 Holiday. That’s it. Only spend $100 on the entire Christmas season, which includes gifts for the kids. We are going to try this out for the upcoming holiday season, which will certainly be a challenge when we start thinking about not only family gifts, but coworkers, secret Santa exchanges, ugly sweater parties, etc.
Some Gift Ideas (page 18):
• Coupons for baby-sitting for working parents
• A certificate for a home-cooked meal for a single person who eats out a lot
• Make a tape of your children singing for out-of-town grandparents
• Grandparents can make a tape of themselves reading their grandkids’ favorite bedtime stories and send them the book with a copy of the tape
• Video oldest relatives talking about family history. Send the tape to family members for Christmas
• Collect your favorite recipes and create a personal cookbook
• Scan photos and make a photo album for family and friends
Part Two: The basics of saving, spending, and investing your money
This includes exactly what it says: the basics. Get out of debt, don’t cosign on a loan, inexpensive Christmas gifts, how to read/order/dispute credit reports, don’t lease cars, pay off your mortgage, be wary of lending money to family and friends, don’t use tax returns as windfalls—reduce them, use a budget, set goals, caring for a disabled family member, allowance, life insurance, losing a job, planning funerals, wills, ID theft, easy money=scam, retirement, mutual funds, college savings, hiring a financial planner, goal-setting.
Sample Allowance Agreement (page 166)
I hereby agree that I will pay my son(s)/daughter(s) the sum of $____ every week/month. (Pick a regular day so you won’t forget if the allowance was paid).
Your allowance will be given under the following conditions:
1. The allowance will not be tied to any specific chores or grades. You are a member of this household and as such you are responsible to help around the house and get good grades without being paid.
2. A minimum of ____% of the allowance must be put away for savings (If you tithe as a family, then your child should also tithe their 10% from their allowance).
3. ____% of the allowance will be withheld for taxes. (This will give you an opportunity to discuss how taxes affect the amount of money they will net when they get a real salary. This money can be divided between charities and/or a college fund. You should let the child choose the charity).
4. Each dollar saved will be matched with an additional $____. The matching money must be used for an agreed upon savings goal (e.g. bicycle, computer). The matching money cannot be withdrawn from the bank or spent without prior approval. (This may give your child more incentive to save)
5. The following expenses are to be paid out of your allowance (e.g. school lunch, CDs, movie tickets, gifts for friends; choose a certain number of expenses, but don’t overdo it)
6. Your allowance cannot be spent on the following items:
7. Every month you must prepare a budget indicating how the allowance will be spent.
8. No advance on the allowance will be given. No exceptions! (This is your chance to teach your child that they have to live within their means or budgeted allowance)
9. Once a year, on your birthday, there will be an allowance review meeting. At that time we will negotiate a possible raise in your allowance.
Parent and child agree to the above conditions.
Date of Agreement:
Sample Rental Form (page 132)
This Rental Agreement is made with the following tenant(s):
The tenant(s) will occupy the residence located at:
The tenant(s) agree(s) to the following terms:
Rent: The total monthly rent is $____. If there are multiple tenants each will be responsible for the following monthly rent amount: ____. Eeach tenant is responsible for the full amount of his/her portion of the rent even if another tenant fails to pay his/her share.
Rent due date: Rent shall be paid on the ___ day of each month directly to ____.
Late fee: Failure to pay rent by due date will result in a $____ (I suggest $25) late fee assessed for each monthly rent payment not paid on time. A partial payment of rent is considered to be late and therefore a late fee will still be assessed.
Loss of employment: Each tenant is still responsible for paying rent even if he/she is not employed. Until the tenant is reemployed, the amount of rent will continue to accrue. Arrangements can be made to pay past-due rent; however, the home owner must approve any such plan. Once the tenant is again employed, the full rent is due as stipulated in this agreement.
Living arrangements: The bedroom(s) will be allocated as follows:
Shared space: The following are conditions of the shared space:
Utility charges: Each tenant agrees to pay ____% of the utility charges, ____% for gas and/or electricity, and ____% of the water bill.
Telephone charges: Each tenant will pay ____% of the monthly telephone service charges and will be responsible for all of their personal long distance phone calls.
Food: Each tenant is responsible for providing their own meals or they will be assessed a ____% of the weekly/monthly grocery bill.
Household chores: The tenant(s) will be responsible for the following household chores:
Overnight guests: Each tenant must obtain permission from the owner of the home prior to the stay of any overnight guest(s). No overnight guest(s) may stay longer than ____ consecutive nights.
Smoking: Smoking ___is ___is not allowed in the residence.
Vacating the residence: The tenant(s) must give the home owner at least ____ notice that he/she plans to move out of the residence.
Sample Personal Loan Agreement (page 127)
The lender(s) ___________________
The borrower(s) _________________
Length of loan (weeks/months/years):
Total loan amount: $
Annual percentage interest rate charged:
Repayment conditions: The borrower(s) agree(s) to repay the agreed-upon loan installment of ____ on the _____ day of each month/week.
Late charge: Any payment not paif within five (5) days of the due date shall be subject to a late fee of $____
Total payment due at the end of this loan agreement:
Prepayment: The borrower(s) has/have the right to prepat the entire loan amount at any time. Interest will only be due for the time the loan is outstanding.
Co-borrowers: All borrowers listed on this agreement shall be equally responsible for paying the entire loan balance, including any interest and late charges due.
Default: If for any reason the borrower(s) fail(s) to make ____ number of payments on time, the loan shall be in default. The lender(s) can then demand immediate payment of the entire remaining unpaid loan balance, including any interest and late fees.
Legal fees: If this loan results in legal action for nonpayment, the borrower(s) agree(s) to pay any attorney or court fees associated with the collection of the unpaid loan balance.
As a legal adult 18 years or older I am fully responsible for paying back the full amount of this loan.
Notarized signature of
Date of loan agreement: