Couples With Children, In Debt, With Modest Income Can Amass a Fortune
In their book "The Average Family's Guide to Financial Freedom," the Tooheys offer practical advice, based on their own experience, on how an average American family -- with children, in debt, and making a modest income -- can take control of their financial lives.
Instead of struggling with an unrealistic plan to save thousands of dollars, the Tooheys suggest that we simply learn how to spend better, since spending is what we do most, and "spending less is easier than saving more."
The Tooheys believe that "telling people to save is like closing the barn door after the horse has already escaped. It's the right thing to do, it's just too late to accomplish anything" because "saving is what you do with the money that is left over after spending."
Putting their own advice into action, the Tooheys managed to accumulate an astounding $467,000 in 8 years on a family income of $65,000.
The Tooheys' advice is similar to recommending that we eat right rather than go on a diet. Smart spending is better than cutting back and doing without, but you still need to know where your money is going, so the Tooheys recommend tracking your spending in categories like those in the Budget Worksheet, entering the information in your personal finance software (like Quicken or Money), and asking yourself questions similar to the following while reviewing the reports each month:
- Where is our money going?
- Do we really need to spend so much on this category?
- We spent more than expected in this category this month. Why? And what can we do to prevent it from happening again?
The Tooheys' book is filled with practical advice on how to turn your average income into above-average wealth. Visit the Financial Planning Bookstore for information on buying this book.
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