I recently finished reading Financial Recovery: Developing a Healthy Relationship with Money by Karen McCall and think it’s a good addition to anyone’s personal finance library.
Remember, I am a graduate of Dave Ramsey’s Financial Peace University so that’s my reference point for comparison. I found Financial Recovery to have some similar ideas but with a kinder, gentler tone.
Author Karen McCall hit rock bottom and was very close to being homeless. She figured out the root cause of her money management issues and worked to resolve it along with becoming financially secure.
In order to help others, she founded the Financial Recovery Institute where people are counseled through a holistic approach.
There were several concepts in the book I thought worth sharing.
Money/Life Drain: The money/life drain which has 5 levels in an inverted pyramid. The higher the level, the closer you are being pulled downward to the drain in a swirling force.
Needs/Wants: With the premise that most bad money behaviors comes from a sense if deprivation, it makes sense to examine our expenses and understand if they are really needs or we’re trying to fill something else with a lot of wants.
Tracking: Tracking is encouraged to help the user become aware of where the money is going. The author encourages keeping separate tracking sheets for cash, checks and credit card transactions.
Bridging: Creating a spending and income plan is described as being the bridge from the current state to the desired state. I make a monthly spending plan but now plan to create an annual plan based on the recommendation.
Saving: Saving is described as the key to freedom from debt. McCall labeled it “saving your way out of debt”. By having an emergency fund, the need for new debt is eliminated.
I really liked the format of this book which included case studies throughout to reinforce the chapter’s points. There are also excellent quotes from famous (and not so famous) people. These were used well with the chapter’s content and helped keep interest going.
I read this book mostly during air travel and couldn’t wait to get to the internet so I could download materials and subscribe to the author’s blog. Only problem is, I couldn’t find some of the resources referenced as being available online such as the work history inventory. This is my only complaint about the book.
I think this is a good option for those that think other approaches are not a good fit.
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Disclosure: I received a free copy of the book for review purposes. The opinions are 100% mine.