Book Review > Why Saving is Like Dieting and Budgets Don't Work

This is a good little book (under 150 pages) for anyone who has trouble managing their money. It's not really designed for those who have reasonable money management skills but would like to save more, but they might find some of the tips quite useful.

The book has 30 short chapters which are easy to read and provide and Action Plan list at the end where appropriate.

The book starts with five myths about money management with Myth 1 being "The more you earn the more likely you are to be able to save". The second chapter then talks about "financial dyslexia" or dyscalculia which. Whilst this is relevant to money mismanagement (it is a genuine medical condition), I thought that putting it right at the front might give some people an excuse to believe that they couldn't change. It would have been more appropriate near the end for this reason.

She then goes on to describe eight money personas: spenders, grazers (low cost item buyers), bingers, closeters (buy and hide), returners (buy and return), debters (pay the debts but can't save if they have no debt), misers and justifiers (buy for others). I'm not sure where those who can control their money fit - maybe they don't have a category.

Jackson contends that there is no "money management" gene and that financial skills are learnt. She also provides several case studies where individual's perceptions about their money management skills have developed from childhood. Hence she argues it is important to teach your children money skills from an early age and, more importantly, to not berate them for making mistakes with their money.

She then goes onto develop a five-step money action plan which she describes in some detail. She suggests some money management methods eg diary system, computer-based systems and the envelope system. Some of these are not new, my Mum used an envelope-like system and I'm sure this was how I learnt my some of my money management skills as I did the same when I left home.

She also suggests some secret weapons in a money buddy and a pigout pig (ie money box!).

Finally she deals with ways of controlling credit card expenditure and the consequences of starting a family.

The book is well written and easy to read. The information provided would be adequate for most people with "money mis-management" problems to deal with. However, those with severe problems eg requiring debt restructuring should probably seek professional help.

Jenni Eason is a member of the AIA.