Review: On My Own Two Feet

I've been thinking about personal finances recently as I plan out my monthly student loan payments for my first few months in the working world. Also, that position I received through all those interviews is fellowship-like and will result in a pay-cut for the year, which makes getting my finances together more crucial. On the recommendation of my college alum Facebook group, I recently read On My Own Two Feet by Manisha Thakor and Sharon Kedar. It is a personal finance book geared towards young women, though the advice is gender-neutral. I enjoyed it (its concise and is an incredibly fast read) and recommend it for other young adults. I wish I had read it when I was still in college or shortly after graduation. There are, however a few caveats to my recommendation. 

First, the book is definitely geared towards beginners. Current college students and very recent graduates have the most to gain from it. Although my personal finance knowledge has some gaping holes, I am probably someone who was moderately sophisticated when it came to personal finance even before reading the book. I knew a bit about US personal income tax already (i.e. the difference between a tax credit and a deduction and a bit about itemized deductions versus the standard deduction). I haven't done any investment or saving for retirement, but was aware of many of the basics. In that light, many chapters of the book were not too useful. The updated student loan chapter is not that helpful from the perspective of someone who keeps up to date on the relevant information (interest rate, when deferment ends, etc.) regarding their loans.

Second, the book is geared towards readers in the United States. This might go without saying when it comes to any book in this genre. Some of the parts that were new to me concerned insurance, the potential calculations when buying a home or a car, and how to approach investing. While I lack specific knowledge of what those things look like outside the US, these details are likely very country-specific.

Third, the book does include some good investment tips that are probably still relevant to more sophisticated investors. Their main tip with regards to investments is to look primarily to passively managed index funds because on average and over time the returns on those are often better than those from more actively managed funds while charging lower fees. (Playing with individual stocks is, of course, risky for those without specialized knowledge.) While these tips might sound very basic, a lot of the more experienced investors in those alum Facebook groups generally stick to the same tips when people ask for investment advice, so there must be something to it.

I was at least gratified to see that I have already taken some of the first steps they recommend: I have started tracking my budget carefully, setting aside an "emergency fund," and plan to save the maximum for retirement that I can under US tax law in my first year of work, though things get more complicated (and I will have to save less) during my fellowship. As an aside, I suspect (and hope) that I'll be doing a lot less shopping in the next few months.