At the moment I'm enjoying reading this book by Suze Orman, who is an American author that writes about the subject of personal finances.
This particular book focuses on the finances of women and on how, as a woman, you can take control of your finances and be prepared for every eventuality.
I bought this book from the CS last week. It seemed just the thing to motivate me this year, when I'm trying hard to get on top of my finances. It's quite a thought provoking read, although it is mainly aimed at American readers.
One thing that she wrote particularly struck a chord with me. If you don't adequately value your own time, don't expect anyone else to value it. So true in my experience. Don't get me wrong, I don't expect to be thanked constantly for things I do, but sometimes the way you are spoken to can make a big difference in terms of feeling like your time and efforts are valued.
Anyway, the book itself is written along similar lines to Dave Ramsey's Nine Steps to Financial Freedom. She focuses on first building up an emergency fund that could cover a full eight months expenditure, to allow for possible job loss or illness.
Once this has been saved and put away, she focuses on paying down debts such as credit cards. She goes into quite a bit of detail about the best way to do this, namely starting with the card with the highest interest rate.
She also talks a lot about credit ratings and how the way you tackle paying off your debts can affect your ratings. Again, this is focused mainly towards the US financial market, but it is still quite interesting reading, as it highlights how cancelling too many paid off credit cards, or transferring balances too often to 0% deals, can have a detrimental effect on your credit score.
The book was published in 2010, after the financial collapse, at a time when banks were withdrawing lines of credit to cardholders in the US for no apparent reason and as a consequence of this, she doesn't necessarily advise you to cut up your cards and close accounts, as you might not be able to get new ones. She suggests that having at least two credit cards, one for monthly use and one for emergency use, is the ideal, as it will give you options should you be really desperate for cash and will also keep future mortgage and other credit options open, as it will provide you with a credit history.
Orman also advocates that all women should have a bank account separate from their partner's, which not everyone might agree with, but I can see her point, as without any individual financial history, getting credit could be a problem if you were to find yourself on your own at some point in the future.
Towards the end of the book, she also delves into the areas of saving for retirement, saving for college fees and obtaining the right insurances to protect your family and help you to feel in control of your finances and your future life. I'm looking forward to these chapters as I read on.