Mad Times

Debt-Proof Living by Mary Hunt

Someone on the 43 Folders mailing list mentioned this book with an executive summary that turned out to be the main thing that stuck with me from reading the book.

Here it is: First, kill off all your unsecured debt. Done? Good. Now out of every paycheck, put 10% off the top in savings, give away another 10%, and then live on the remaining 80%. By way of managing that 80%, set up a "contingency fund" to bail you out in the event of a major catastrophe (lose your job, that kind of thing), and then through monthly contributions, build a "freedom account' which buffers all your recurring, but non-monthly expenses so that the money's there when you need it (for insurance premiums, tax bills, christmas presents, whatever).

None of this is rocket science, but it is spelled out here in one place where you can see it long enough to get it into your brain (if your brain, like mine, isn't very good at holding on to such concepts). There's a bunch more stuff delving in to more of the nitty gritty details of living a debt-proof life. The book is no Your Money or Your Life (Dominguez & Robin's deservedly classic financial management book), but it was a good refresher for me.