book review: stop getting ripped off

by Bob Sullivan

One of my favorite personal finance books is, Getting A Financial Life: Personal Finance in your 20’s and 30’s. I bought the book for all of my siblings at one point or another because I think the book has a lot to offer. I really like this new book as well. The book is subtitled, Why Consumers Get Screwed, and How You can Always Get a Fair Deal. Sullivan does a great job outlining how industry’s goals, making a profit, are not aligned with your best interest, getting things at the best price.

What I found most useful in the book was how he outlined in detail the fees associated with purchases such as buying a house or your cell phone contract. He goes through the HUD-1 form, explaining, for example, fees associated with Title Insurance should bring up a red flag in your mind at closing.

He also separates the readers into three buckets when he talks about credit cards: 1. People who pay off hteir card in full every month, or deadbeats to the credit card industry, 2. People who sometimes carry a balance, and 3. People who always carry a balance. Sullivan then explains how best to utilize your credit depending on the type of credit user.

The most useful chapter to me, however, was the chapter on “Getting a 21st Century Raise.” He explains how you can go about utilizing your off hours to generate extra income. I really liked some of his ideas about “having the conversation” with your boss about a raise, what you need to put together to get the raise, and what to do if you don’t get the raise.

As some of you know, Brent and I conceptualize money differently. He is great at tracking where he is spending money, but I need a plan looking to the future. For me, spent money is gone, so of little consequence. To get over this difference, we created a one page document. The first chart has our each of our incomes, yearly and monthly, gross. The second chart lists all of our debt: student loans, etc, laid out in total, and with our monthly amount owed. The third chart lays out our fixed expenses for the month: cell phones, TIVO, rent, etc. I then take table one (income) and subtract table three (monthly expenses) which equals the amount of money we have left at the end of the month to tackle our combined debt. We update the page monthly and have been using this method for about a year, to great success. It really allows us to see how much money we are paying off. (If you would like a copy of our sheet, drop me an email.)

Sullivan advocates a similar approach in his book, and calls it a debt map.

I think this book is great. By the way, this is another “early” review…which I think is pretty fun. The book is due to be published January 2010.