Don’t let FOMO (Fear Of Missing Out) rule your financial life. That’s the basic premise of Rachel Cruze’s latest book, “Love Your Life, Not Theirs – 7 Money Habits For Living the Life You Want“. In the book, she talks about her struggles with seeing all her friends going on nice vacations, getting great new cars, and having Pinterest-ready homes, while she and her husband, Winston, are living a debt-free newlywed life on a shoestring (well, it’s a shoestring in that she can only buy one pack of Pottery Barn fancy baby washcloths instead of the multiple packs she wants). Don’t let FOMO rule your life, she preaches, and then proceeds to go through the seven money habits you need to live life the Ramsey way.
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Now, I listened to Dave Ramsey’s podcasts for over a year, every single day on my commute to and from work, to get out of debt. There’s no person that will motivate you more, and I’ve listed him on my favorites page for being the best for reaching debt freedom. If you’re struggling with debt, go download his podcasts and take “Financial Peace” out from the library today. As for this book – well, read on for my review.
The Baby Steps
Rachel doesn’t exactly refer to the baby steps in this book in a nice clean format, but they’re definitely here. She’s just written paragraphs and passages about them instead of listing them in clean, clear steps. If you’re not familiar with them, they are:
- Save $1,000 in a baby emergency fund
- Pay off all debt except the house
- Use the “Debt Snowball” – take all extra money every month and pay off debt, starting with the smallest balance. Once the smallest balance is gone, take that payment and the extra you were paying and attack the next-largest balance. Continue until debt-free.
- Note – in the book she says to “start an avalanche” but then talks about using the debt snowball. The “debt avalanche” is actually a different debt payoff method, where you pay off your debts starting with the highest interest rate instead of the lowest balance. It’s mathematically, but not behaviorally, superior. And studies have shown behavior is what counts.
- Save a 3-6 month emergency fund
- Invest 15% for retirement
- Fund college for your kids
- Pay off your house, which you’ve gotten with a 15 year fixed rate mortgage taking up only 25% of your take-home pay
- Build wealth and give!
Once you know them, you’ll see the baby steps throughout this book. You can also pop over to this site to check out more about them.
The Seven Habits
The first two chapters of the book are devoted to feeling blessed with what you have, rather than jealous of other peoples “#blessed” lives they’re posting on social media. If you focus on what your friends and family members are posting, you may feel that what you have is inadequate-even if it made you happy five minutes ago. Rachel also talks a lot about budgeting, living a debt-free life, and being on the same page financially as your spouse.
The seven money habits she walks through are:
- Quit the Comparisons – Stop that FOMO!
- Steer Clear of Debt – A debt-free life is the only way to go
- Make a Plan for Your Money – Budget like crazy
- Talk About Money (Even When It’s Hard) – Be on the same page as your spouse/partner
- Save Like You Mean It – Save for the things you want, including hopefully a house on the 100% down plan
- Think Before You Spend – Spend in alignment with your values, not just because other people are spending
- Give a Little…Until You Can Give a Lot – Give to others, even when you’re in debt. She suggests giving 10% of your income to start
If you think this looks like a very basic list, you’d be right. This book isn’t for the personal finance nerd, or someone who’s interested in refining their frugal habits. It’s also not for the hard-core frugal. It’s a very soft, basic, gentle book that has lots of stories that someone who’s been used to living beyond their means might relate to.
I’ll be honest – I don’t find her struggles or stories personally compelling the way I do her fathers. Dave went bankrupt and fought his way out of debt, clawing his way out of the hole, and became a huge success after many years of hard work. I like his story, and the examples he can give both from his real life and the lives of the many he’s worked to change over the years. Despite the fact that he’s a multi-millionaire today, you can tell that he’s really struggled to get there.
Rachel also shares her stories, but they’re rather…privileged in my opinion. I don’t find an emergency where she was in a small car accident – after dropping off thank you notes from her wedding of hundreds of people – to be inspiring. This is probably because my emergency was when my husband almost died of septic shock (and I also had 50 people at my wedding, that I paid for myself). Or that time she’s in New York City for work and spends $250 over budget shopping for clothes – she felt guilty for not letting her husband know ahead of time. Don’t worry, there’s a happy ending because she texted her husband eventually and she got to keep the clothes. And the fact that she can only get a “few nice pieces of furniture” for her new house. In her 20’s, when most of us are still making do with Ikea, Craigslist, and hand-me-downs. So she’s embarrassed to have friends over because they don’t have as much nice furniture as she wants. And lets not forget her sadness when her mother bought a nice expensive purse but she couldn’t afford the same thing as her multi-millionaire mother.
We can all relate to the struggle where your mom got a new Hermes bag, and all you can afford is the Prada. Right?
I noticed the same thing in her last book, Smart Money, Smart Kids. She tends to use examples from her life, which is usually a good idea. After all, we as humans find stories to be extremely compelling. That’s why we read other peoples blogs, right? They’re essentially stories of someone elses life. For me, her stories fall a bit flat. Maybe someone that grew up more upper-middle class can relate better to them. But I’ve had a life of struggle – working my way from $22k per year to six figures, going from community college to an MBA, becoming debt-free despite living on one income (mine) – so I relate much more to Dave and his stories.
Her experiences are hers – I’m not invalidating them just because I don’t relate to them. The fact is that she doesn’t have a compelling story of struggle like her father. And that’s fine! Hopefully other women who do have the background she does and can relate more to her are helped by this book. The more people that can be helped financially by different people, the better off we’ll all be.
My perception is that I’m not the target audience here. It looks to be targeted at late-20’s to early 30’s women who grew up upper-middle class. They struggle with wanting “all the things” their friends have, and the things their parents have after 30+ years of hard work. Perhaps they have some debt (car loans, credit cards, student loans) and are tiring of all the payments. If they need someone to talk them into a slightly-less fancy SUV, then Rachel’s here to help. If you’re interested in financial independence, early retirement, or you don’t have an excellent job in your back pocket-you might not find the stories relatable either.
Product Pitches In The Book
As a public service, I wanted to be sure to identify where Rachel is selling you things. If you’ve picked up this book and you’re not familiar with the Dave Ramsey empire, you may not be aware of the pitching for various “Ramsey Solutions” products. Here are four product placements you should know about:
- Every Dollar app – Recommended on Page 125 to help you budget and track your spending. The app is free, but you’ll need to manually add in all your transactions, which you can do in Excel for free as well. If you want it to automatically track your spending like Mint and Personal Capital do for free, you’ll need to pay $99 per year for the “Plus” version
- Retire Inspired by Chris Hogan – This book is recommended on Page 147 as “…the only retirement book I’ve seen that’s easy to understand and actually fun to read.” She forgets to mention that Chris is another Ramsey Solutions personality
- Clip System – Rachel devotes much of a chapter raving about a clip system she uses to manage her money. Essentially she takes the budgeted amount for each category and uses the clip system in her wallet, so when you’re out of money, you’re done! Now, you can do the same thing with envelopes from your drawer for free, but why do that when you can pick up her book plus the wallet and clip system for $49.99? It’s usually almost $100, but you can save 46% going online! Don’t need the book? You can get the clip system alone for $39.99 – as featured on Rachael Ray!
- CMO Protip – If you’re struggling with debt and want to try out a cash budget, please just get some envelopes from the drawer and put your cash in them. Don’t have envelopes? You can buy some from Staples for $3.99 for 50. Or use paper clips. Or rubber bands!
- Financial advisors – On Page 148 she recommends getting a financial advisor to help you with retirement and college planning. Perhaps this is just because I’ve listened to the podcast so many times, but I took this as a plug for Dave’s “Endorsed Local Providers,” or ELP’s, who will help you manage your money. Retire Inspired was also full of plugs for financial advisors. And what better place to find one than looking through Dave’s ELP’s?
You’re certainly not going to go wrong following the advice in this book, and you’d be better off than most Americans if you do. But if you’re a personal finance nerd like me, there’s not going to be anything new here. Personally, I’m glad I got it from the library and it definitely isn’t going on my “re-read” list. I’d rather read Dave’s books again.
This would be a good book to give to a woman (I don’t think most men would like it) who lives an upper-middle class life and is just starting to get interested in money and better managing her financial life. There’s nothing hard-core frugal here, no investment formulas, no “intimidating” math, and very few specifics. It’s mostly paragraphs of stories and talk about developing good habits, sprinkled with the baby steps and some product placement.
Have you ever read any of Rachel Cruze’s books, or heard her on the podcast? What do you think of her stories and her books? Have you ever bought any “Ramsey Solutions” products? Let me know in the comments.
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