Get a Financial Life: Personal Finance in Your Twenties and Thirties By Beth Kobliner
Like many young adults, maybe you’ve recently come out of the academic pipeline feeling a bit uneasy about your financial knowledge and confidence in being able to handle your affairs. In Get a Financial Life, Beth Kobliner aims to give such individuals a one-stop book covering all financial matters. Kobliner moves from understanding where your money goes, whittling down debt, banking, investing, and retirement saving, to home ownership, insurance, and lowering your taxes, providing great resources in each section. There’s really a treasure trove of information in this book. Let’s take a look at some of the key takeaways from each section:
Taking stock of your financial life
Perhaps you’re thinking about buying a house or a new car. Or maybe you’re swimming in debt. Either way, it helps to take stock of what you’re spending and to quantify your goals. Kobliner provides charts to help you save to meet your savings goals over various timelines. If you feel like you don’t know why you’re penniless after each paycheck, she recommends following your spending for at least a month to see where all your money goes. Additionally, she recommends a few guidelines to evaluate your financial fitness:
- Spend no more than 30% of your monthly take-home on housing.
- Dedicate at least 15% of your take-home pay to savings. Make sure to automate this payment.
- Try not to allow your monthly debt payments (not including mortgage) to exceed 20% of your take-home pay.
Dealing with debt
In this section, Kobliner notes that a few simple phone calls to your credit card or student loan provider may reduce your interest rates, thus saving you hundreds of dollars over the years. She also provides valuable information about the five factors contributing to your credit score. These include:
- Your payment history
- How much you owe
- The length of your credit history
- The type of credit you’re managing
- The number of new credit applications.
She encourages readers to get copies of their credit reports at least annually, to ensure everything checks out. Additionally, she encourages paying off high-rate credit card debt before meeting other savings goals.
Take the time to find a bank that’s right for you. Ensure it provides free checking, online bill paying, and ideally fee-free ATM usage. There are great resources out there, such as Bankrate.com or Depositaccounts.com that let you compare rates offered by different banks. Internet-only bank can also be a better way than a brick-and-mortar bank to store some of your savings, some offering far higher interest rates. Kobliner suggests keeping your savings in an Internet-only bank and having a checking account at a regular bank.
All you should know about investing
I would recommend another book if you’d like more investing advice, but this section does cover the basics. Kobliner recommends building an emergency savings cushion of three to six months’ worth of living expenses prior to investing your money. Once you have a nice cushion, look for low-cost mutual funds, bonds, and ETFs. If you have a number of assets, it may be a good idea to look for a reputable financial advisor.
Saving for Retirement
Start now! Like all authors, Kobliner emphatically states that it’s never too early to start your retirement savings. Participate in your company’s 401(k) plan and try to maximize your contributions, or at least as much as your employer will match. If you’re in your 20s or 30s, you may have more to gain in a Roth 401(k) than a traditional 401(k). Once you’ve maximized your contributions to your 401(k), opt for an IRA and begin to funnel your money there as well.
A Home: To buy, or not to buy?
There are quite a few factors that go into this decision-making process. If you are seriously considering purchasing a new home, make sure you tie up all your loose ends, since lenders will take a look at your credit score, income, savings, debt, and job history. See if you can get ‘prequalified’ for a mortgage, and then ‘pre-approved’. This will give you a good idea of how big a mortgage you can realistically afford. Kobliner notes the importance of building up a good-sized nest egg for a down payment, which will lower the amount of interest you’ll owe over time.
Insurance: What do you need?
Kobliner details many different types of insurance and ways to get the best deals for each one. To start, you absolutely need health insurance. Following that, you should have car insurance, disability insurance, and homeowners insurance at a minimum. She provides ample websites to check rates for each, but a quick Google search will also suffice. Kobliner also includes insurance you probably could do without: flight accident insurance, extended warranties, laptop insurance, and pet insurance.
If you enjoy non-fiction, and are looking for a finance book without the fluff, this book is for you. It reads more like a reference book, loaded with facts and no frills. The sections divide up nicely, so it’s easy to refer back to a specific question you might have on credit scores or your 401(k) plan. Kobliner provides the information, and allows the reader to make their own decisions as to what they’d feel most comfortable doing with their money. Even though I’ve read nearly a dozen personal finance books this year, there was still plenty of new insight in each section. I enjoyed the straightforwardness of Kobliner’s writing, and never felt bored even with all the facts and resources she included. It truly reads as if all Kobliner wants is for financial success for all her readers. There’s certainly much more in the book from what I’ve included here. I can see myself referencing this book from time to time in the future.
Star Rating: 3/3 stars