Book Review: Liz Weston’s “The 10 Commandments of Money”

(Note: a shorter version of this review was published last week on the Dollar Stretcher website. Here’s the unabridged edition with formatting and more links.)

Every generation has a financial author who teaches them how to make their life’s money decisions. For readers of a certain age, Sylvia Porter and Jane Bryant Quinn come to mind. You might not even know what questions to ask, but they’d help you think through all the major issues.

This generation’s author is Liz Weston.  She’s already the Internet’s most widely read personal-finance columnist, and her latest book organizes her advice into The 10 Commandments of Money.

Part of the problem with learning how to handle your money is that the rules keep changing. What worked for your parents might not apply to your situation, and your offspring will roll their eyes at your own time-tested financial wisdom. Liz doesn’t preach a checklist of simplistic rules. She shows how these 10 commandments have changed over the years. This is not your parents’ financial advice because it’s a whole different set of rules. She categorizes each commandment by its generational wisdom: “Old School”, “Bubble Economy”, and “New Rule”.

You can read the commandments on the book’s Amazon.com website,  so let me skip to the conclusions. She shows young adults a simple way to set up a budget and when to modify it. (It works for older adults too!) If you’ve struggled to put together a budget that works for you, or if you’re too discouraged to even try, then read just this chapter of the book. Her suggestions on different expense categories and how much to allocate for “mandatory spending” or “discretionary spending” will get you started.

She shows you how to use credit responsibly. If you just can’t handle plastic (you know who you are), then she shows you how to live with cash. She explains why college tuition and home prices are practically out of reach for today’s generation. (Hint: it’s your parent’s fault.) She shows you how to get the most for your education and shelter dollars. She even suggests the right reasons to take on debt, and how to keep it from taking over your life. Debt is not inherently “good” or “evil.” It’s just a shiny tool with very sharp edges. You may not want to pile up six figures of student debt for that prestigious diploma, and you may not want your dream home (with its nightmare mortgage) for many more years. She even delves into the details of when to stop trying to pay your debts to negotiate a settlement, ask that they be forgiven, or declare bankruptcy. Then she moves on to fixing your credit score and building your retirement savings.

The book is not only for singles and couples but also for divorcees, single parents, empty nesters, and about-to-be-retirees. She includes plenty of stories from those who’ve sought her help and gone on to achieve success.

After you’ve made it through the first eight commandments, she concludes with life advice on marriages and consumerism. You could roll your eyes here in memory of your parents, but it’s a sound foundation to build your own financial wisdom.

I appreciated the opportunity to review this book. Now I’m going to pass it to my college daughter, let her roll her eyes at my feeble attempts to fix up her financial foundations, and then watch her “teach herself” how to do it.

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Where to put your savings while you’re in the military
Simple ways to start saving
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Retirement budgeting

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