The Personal Finance Secrets “They” Don’t Want You to Know About

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Secret Garden I by Scoobymoo on Flickr!I get asked to review all sorts of crazy personal finance books, plans, programs, and schemes all the time, ranging from the reasonable to the completely outlandish.

For the most part, all of these programs share more or less the same content. Get your spending under control, call up your creditors and negotiate lower rates (or in some cases a balance reduction), adopt a very strong debt repayment plan, and kick it in the teeth. A few of the programs involve some legal manuevering in which you attempt to buy your bad debt from the creditor (and then obviously dismiss it), but the legal gamesmanship there is murky, dealing with legal nuances that are far from clearly explained.

This is the meat and potatoes of personal finance, and it’s pretty much true across the board. Spend less than you earn and get rid of bad debt and plan for the future. Most of it boils down to nuances of those two statements – earn more, spend less, pay off debt, invest, and so on.

In truth, the big difference between most personal finance books, programs, and other materials is in how they’re packaged. Dave Ramsey’s stuff is packaged in the guise of a straight-talking Christian. Suze Orman paints the picture of a successful career woman dispensing this advice. Jim Cramer plays the role of exciting enthusiast. David Bach plays the role of the “friendly teacher” who tries to make something complicated into something simple.

And you also have the people that use other methods to convince you. Kevin Trudeau, for instance, plays the role of the insider who is letting you in on “secrets” (often making over the top and potentially false claims along the way) – and that appeals to some people.

Here’s the truth: almost all of these programs work. They all deliver most of the same information, they all agree on the basic principles, and they all offer a program that will get you into a better financial place.

The only real difference between most of them is in minor details – and in how they’re presented. That’s really it – the little details and the presentation.

So how do I pick the best program if they’re all largely the same? Here’s where the library plays to your advantage. If you’re stuck in a financial hole and need help digging your way out of it, head down to your local library. They have a mountain of books and workbooks on personal finance topics. Dig through several of them and find the one with a voice that clicks for you. It might be the Christian-edged straight shooting of Dave Ramsey. It might be the liberal themes of Your Money or Your Life. You might find what you need in the strong “coach” voice of Larry Winget.

Your local library is the place to find out what works for you. When you do find the right one for you, though, it can be worth your money to buy that program for your own use. That’s so you can get away with writing notes in the margins, underlining key pieces, filling in the blanks in workbooks, and so on.

For me, it happened to be Your Money or Your Life that clicked when I needed it, though I found Dave Ramsey’s material to be influential, too. I found it by realizing I was in financial trouble, going down to the library, checking out a pile of personal finance books, and reading through them until I found one that really made sense for me.

If you’re worried about your personal finance situation, don’t run down to your bookstore and pick up a book for help. Instead, read the free articles that are out there and hit the local library. Then, if you find a book or a program that really clicks for you, then buy it for your own long-term use.

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17 thoughts on “The Personal Finance Secrets “They” Don’t Want You to Know About

  1. Yes, I agree with Trent. All personal finance comes down to: first, know and understand your situation, then do something about those things that may need to change.

    In the end, those are the only two things that matter. It all works IF you follow it. Following it is the key, and that’s where the differences between presentations comes in. Different people use different psychological and motivational methods to get their habits and thought patterns in line with what has to happen to make “spend less than you earn” become the status quo. To my mind, some methods are “gimmicky”, such as “hiding income” or spending money so that you are “surprised” later with the amount you have left over.

    If that works for some people, they should absolutely do it and I fully support them.

    However, for me, I find it works better to always have FULL knowledge of how much money I have or don’t have. Hiding things from myself is something that, while it might work for an overspender as an interim step, is not the same as being able to say, “actually, I have only $84.13 allocated for this kind of spending right now and I don’t have a prospect to increase the available amount. So that’s the level of spending I can handle, and anything else needs me to make a formal decision (usually sitting down at home later with my budget) to cut spending elsewhere in my spending plan.” For me, this last approach is more powerful and honest with myself.

    In my personal life, I’ve just realized that I’ve already gotten to the point where become more mindful of my spending or more frugal would be pointless or offer extremely limited returns to me. I couldn’t be much more frugal without doing stuff like getting rid of my car completely instead of just using a tank of gas per month and NEVER eating out instead of spending $35 a month eating out. I have made a conscious decision not to do those things. Ifit became advisable to do those things, I would, but I don’t have to and it’s not my vision for myself to live like that. I already am conscious of all my purchases and it’s a reflex habit for me to check with myself, before EVERY purchase, whether it’s worthwhile for me. Money squeaks when it comes out of my wallet, it even squeaks when it comes out of my credit card! At this point, I’ve mastered controlling the outflow of money. What I need to improve now to have a better bottom line is the inflow of money-the top line or income.

    I’ve recently realized this, that I need to pay attention to what is harder for me: the fact that I need to earn more money, not to increase my standard of living in the present, but to maintain it in the future when I may not be able to earn money as easily.

    I need to be saving A LOT of money every year that I’m not saving, and the only way to get it is to increase my income considerably going forward.

    So, that’s my new challenge to myself: Keep the good habits I have (good management of the money I DO earn or have) while changing my habit of underearning for my realistic present and future needs.

  2. I would also like to add that developing personal finance habits has been a process. I have tried many different methods and systems of expense tracking and awareness of purchasing habits as I have gone on, and some of the methods I used in the past (what I might now consider “gimmicky”, for example) I let go of as I changed my attitudes and habits and no longer needed those methods, instead choosing diffent methods that better suited the money manager I had become.

    That’s why I totally support WHATEVER means someone uses in turning their situation around, because different people need different methods at different times in their “journey”.

  3. I’m doing well sticking to the Trent Hamm program, which is reading this blog in order to find unbiased views on what really works from someone who has been there and done it, but isn’t selling his soul to make money off of it.

    Because of your advice and commentary I’ve devised a plan to be out of debt in a little over a year and have enough money saved up to quit my job and start working for myself within 5 years. And I really have this blog to thank for most of that motivation.

  4. Trent,
    I have been trying to work out a budget that works for me but I can’t seem to dig my way out. Every time I get a little ahead something comes up that knocks me back down. I am a single mom (widowed) with 2 kids (11 and 13. We only had enough life insurance to take care of the burial and pay bills for a little over a month. No one ever thinks something terrible is going to happen when they’re so young and life ins. seems to be an unnecessary expense.

    Anyway, there is always something going on at school that costs money(FREE Education???) I make $80 a month too much for my kids to qualify for free of reduced lunches and lunches are $30 a week for 2 kids. My car is paid for so I reduced my insurance to the state minimum but, the AC went out and it’s going to cost me $900 to get it fixed! $900 is like $9000 to me! The girls are growing so fast that I am constantly having to buy the older one clothes and I hand down the better ones to my youngest. We eat very modestly, a lot of red beans and cornbread and potatoes and rice. It’s filling and good for you but hard to send as a lunch for the girls and taking their lunch embarrasses them as very few kids do that any more. I take my lunch to work to save a little that way. After paying rent, utilities,groceries,insurance, school lunches, health insurance and the misc. that comes around, I have nothing left at the end of the month. I cut my cable back to basic, I don’t own a cell phone and just have the minimum on my home phone,and I have an internet service that is just $9.99 a month so I am holding on to it. I already work 2 jobs, 1 full time and 1 part time and I can’t work more because I have to be a mom too! A friend gave me Kevin Trudeau’s book “Debt Cures” but I haven’t had even 10 minutes to spend on it yet. My girls are good and help with the housework and all but when I get off work and fix dinner and help with homework,and do a load of laundry while spending an hour of time just talking with my girls or watching a movie with them, I am exhausted and fall imediately to sleep when I start reading. So, knowing this small bit of my life, I want to know 1st of all if the book is going to be of any help and secondly, do you have any suggestions that might help? I read your articles religiously during my lunch hour and you seem to have it all together. Just give me a couple of pointers on getting ahead when there’s nothing left at the end of the month if you will please. Any advice will be greatly appreciated!

    Living Payday to payday…
    Brenda

  5. The Kevin Trudeau reference should be a lot sterner. The guy is a criminal. He used to sell junk like Memory systems in infomercials to amazingly gullible people. Once the FCC shut him down, he figured using free speech as a weapon, he started writing books. I always thought no one was silly enough to believe the stuff such as the medical secrets “they” don’t want you to know, but met a guy that thinks Trudeau is the Messiah. I was floored. Beware of this nonsense.

  6. I agree too that you have to find one that works for you, I always read personal finance books and take whatever advice they have to offer, and apply it. Dave’s book, didn’t actually click for me, but his financial peace class got me in the grove of dealing with my finances.

    I read the review about your money your life and it has a lot of good points, like why do you work? I truly believe that when you do work your passionate about, the money follows.

    Thats not to say people who are high wage earners aren’t happy, I think when you pick your life career do it because you love it, not because it will bring you wealth.

  7. Great column, Trent… we’ve found this to be true… we read a number of PF books and found that they all said about the same thing; we followed Ramsey b/c of his motivational style more than anything else.

  8. Another great place to start would be the Personal Finance Blogs – a lot of people have read and reviewed those programs. Their feedback could be a great starting point as well. I know that I’ve read a few books that have influenced me greatly based off of reviews.

    But you’re very correct in your statement, most of these systems, plans or whatever you want to call it are selling the same information packaged and presented in a different light. The core is still the same.

  9. I agree with you, however despite the fact I live in an area with a very clear divide – high incomes and minimum wage, and the cost of living is VERY high, our local library does not have a SINGLE personal finance book. It’s probably for that reason I haven’t found a single “book” that works for me. I refuse to buy them all in the hope of finding “the one”. Thankfully I am doing ok on my own (mortgage debt + retirement plan in place), but I’m sure I could be doing better.

  10. I get my personal finance secrets from this blog and from other blogs like it. I HATE money magazine because their personal finance tips are so standard and boring. I prefer the more entrepreneurial approach, which is what I focus on when I write on my blog.

  11. I would go as far to say that there is nothing you could buy in a book which is not available for FREE somewhere on the net (if you look hard enough).

    In saying that though I do get the odd surprise.

  12. I find Money magazine and others like it to focus on people with WAY above average incomes and lifestyles. I guess that sells more magazines, but for once I’d like to see them profile a couple making $50,000 a year living in the Midwest. I guess that’s why I stopped my subscription.

  13. In answer to comment #12, your reference librarian can borrow personal finance books you request from other libraries for you. You can also make a suggestion that the library purchase a few of their own copies for their collection.

  14. As a feminist, I am not a fan of Suze Orman. My brother in law works at Ameritrade and he gave me her latest book (On Money and Women) because they gave it to him for free. I also have seen her on Oprah a few times. It drives me crazy on how she pinpoints women for being spendthrifts- men have the same problem! In fact, I am the more frugal in my marriage although my husband manages our finances.
    Sorry, I just needed to rant a little bit. So about that book he gave me…I read a few pages and put it down disgusted. I then sold it on Ebay for $15- take that Suze!

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