Before she was a senator, Elizabeth Warren was a scholar focused on bankruptcy; she is probably most well-known in that role for writing, with her daughter, The Two-Income Trap; but mother and daughter teamed up again for Elizabeth Warren and Amelia Warren Tyagi’s All Your Worth: The Ultimate Lifetime Money Plan.

What All Your Worth does is pull in Warren’s research, and the insights in The Two-Income Trap, and explain how to use them to make your financial life better. The particular strength of Warren and Tyagi’s book is that it takes a structural approach to personal finance; instead of getting into the fine details of budgeting or coupon-clipping or whatever, it focuses on ensuring that the big picture is correct, and that your income is being divided appropriately between must-haves (housing, transportation, food, and the like), wants (all your more discretionary purchases), and savings (which includes debt repayment).

That structural focus is a huge insight, because it’s something that so few personal finance books look at it, and yet it’s such a big deal—you can scrimp and save on fun stuff all day, but if you’ve got a too-expensive mortgage, you’re in real trouble. Warren and Tyagi note that this is a relatively new feature of modernity—it wasn’t all that long ago that bankers simply wouldn’t give you a mortgage if you couldn’t afford a house, and you wouldn’t be inundated with credit card offers with potentially-ruinous limits—so it’s good that advice is finally catching up to it. Nobody writing a personal finance book after this should be able to ignore this big-picture insight (though I’m sure many will).

I do have some quibbles with the book. I think it’s too harsh on credit cards (yes, some people can’t handle them responsibly… but some people can, and there are real advantages to using them if you’re one of the people who won’t be driven to ruin by them), and I think its advice on investing and saving for retirement is too brusque and will leave people with unanswered questions. But that’s where I’d recommend supplementing this with A Random Walk Guide to Investing or something similar; and it’s not that their investing advice is wrong—they correctly advise you to stick to low-cost index funds—I just think that more detail would help clear up some confusion there.

But quibbles aside, that structural framework alone is worth the price of the book, and makes it a personal finance book I’d recommend heavily to anyone who’s finding it hard to get ahead financially.


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