Book review: Hot (Broke) Messes
Every Sunday, The Simple Dollar reviews a personal finance book or other book of interest.
Hot (Broke) Messes: How to Have Your Latte and Drink It Too, by Nancy Trejos, May 2010, Grand Central Publishing, 320pp
Grand Central Publishing
One of the best parts about writing The Simple Dollar is the opportunity I have to hear from people who have turned their life around due to better financial choices. They usually end up finding themselves on a better personal and professional path as well because they’re empowered and de-stressed due to the improvement in their financial situation.
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The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds – we just want simple ways to manage our finances and save a little money.
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That’s essentially the story told in this book, Hot (Broke) Messes by Nancy Trejos, a personal finance columnist for the Washington Post. In 2008, she found herself in a situation fairly similar to the one I found myself in circa 2006. She seemed to “have it all” in her life, but she wasn’t actually able to pay the bills and was deeply unhappy with certain circumstances in her life.
Much like I did, she swallowed her pride a bit and chose to publicly share the details of her financial turnaround both on the ‘net and in the form of a book. This is her story of turning her financial life around, peppered with useful information and ideas all throughout.
One: Life in DC, as in Debt City
The book opens with Nancy relating the tale of her financial bottom in June 2008, paired with a discussion of her childhood and early years where many of the elements of those financial mistakes were already put in place. Many of the themes of this story sounded eerily familiar to me, even as the details were quite different. The general theme of having a financially strapped childhood followed by a lack of understanding of how to properly utilize a somewhat larger income sounded very, very familiar, in fact.
Two: The College Years: Keeping Up with the Jane Hoyas
When she went to college from such a financially tight background, Nancy seemed to feel fairly unworthy when she arrived at Georgetown. In order to undo that sense of inadequacy, she turned to the abundance of easy-to-acquire credit cards, using them to buy the material things that the people who “belonged” at Georgetown seemed to have. Again, this is a story I can really identify with (and I should write about at length at some point…). She offers several solutions to running into credit problems in college; I strongly agree with talking to your parents if you find yourself getting into consumer debt issues during your college years.
Three: Oops! I Did It Again, and Again, and Again
Much like myself, Nancy’s early professional life involved a lot of upheaval and a lot of personal and professional situations she wasn’t quite ready to handle – and that included her finances, which were often used as a panacea to soothe her problems. After all, after a bad breakup, why not just go to an expensive spa to make yourself feel better? Of course, this is a trap – all it does is greatly extend the period of upheaval in your life. You’ll just pay extensively for it later.
Four: Personal Finance 101
Here, the personal finance advice begins in earnest: getting a checking account, keeping your credit score under minimal control, and making sure your income taxes are paid. For most of us, this kind of thing is obvious, but for a surprising number of folks, these basic steps aren’t basic at all. I’ve met many people who are completely unaware that they should be paying income taxes at all, saying things like, “I thought filing taxes was just for rich people.”
Five: Take My Hand
The real key to personal finance is goal setting, and here Nancy talks about her first go-round with setting goals in her own life as they pertain to better personal finances. Why set goals? A well-stated goal embodies something you want deeply in your life and provides a very clear way for getting there, leaving it up to you to focus on what you need to do each and every day to move towards that goal. Of course, you don’t have to do it alone – use the people around you or even a certified financial planner for assistance.
