A few months ago, I was in a Christian bookstore and I decided to check out the personal finance section. Some of the books appeared to be from health and wealth guys who encourage you to “sow some seed” to benefit their ministries. I’m not into that by any stretch. I then happened upon a book titled Your Money Map: A Proven 7-Step Guide to True Financial Freedom. The author of the book was Howard Dayton, and it was published in 2006. The publisher was Moody Publishers, which is pretty far removed from the health and wealth scene. I then decided to pick up the book to see if it was the same as Dave Ramsey’s Total Money Makeover, which has seven baby steps. It did not.
Rather than just giving seven “baby steps” that are singular in purpose and that have to be followed in order religiously, this book shows more of a lifetime journey that a person might take. Both Ramsey and Dayton argue that financial freedom is a process that could take quite a bit of time.
Your Money Map is distinctively Christian in its outlook. Therefore, those who operate from a more secular viewpoint might be more interested in other personal finance books. This book follows a couple that Dayton counseled regarding personal finance and the advice that he gave them through each step of the way.
The book starts out by arguing that all wealth comes as a stewardship from God. Therefore, it’s important to ensure that we are effective stewards with the money that we’re entrusted with. Dayton argues that one of the first steps that anyone should take when getting their personal finances in order is to begin charitable giving toward religious purposes. This is one of the areas that nonreligious people might disagree with Dayton, but starting to give is part of Destination 1 on the money map that’s included in the chapters of the book, as well as the schematic money map at the very end of the book.
Other goals involved in reaching Destination 1 include the obligatory budget and $1,000 emergency fund. These two steps seem to be pretty standard among the community of personal finance gurus. Both are pretty good ideas. Budgeting ensures that you can avoid spending more than you bring in. If you spend more than your income each month, you’ll wind up with a negative net worth if you’re not already there. If you spend less on a monthly basis, you’ll build up a solid net worth over time. It’s pretty simple, actually. Also, stashing $1,000 allows you to pay for any unexpected expenses that might come up–like the busted radiator I had to replace a couple of months ago. Definitely not cool, but necessary. Learning to handle money God’s way is a little outside the realm of personal finance gurus who are not tied to Christianity or another religion.
Steps 2 and 3 on the money map are where Dayton is a bit different than some of the other personal finance books and websites that I’ve read. Most of these other books emphasize paying off debt at the expense of savings. Your Money Map argues that people should build up a larger emergency fund (for one, and then three, months of expenses) while simultaneously paying down credit card debt and all other consumer debts. This blended approach is refreshing to me, because cash flow is important. Having more money available at any given time can help people avoid building up additional debt should an unexpected job loss or other catastrophe occur.
A possible destination after reaching Step 7on Your Money Map.
Step 4 is related to saving up funds for major outlays like a home or retirement (childrens’ education is optional here). Dayton recommends saving up a substantial down payment for a home so that a downturn in the local housing market does not get a buyer upside-down on his or her mortgage. This is generally sound advice (although I didn’t follow it personally because renting in the markets I’ve lived in has been more expensive than buying–I took advantage of loans with low down payment requirements).
Steps 5 and 6 deal with actually buying the house, paying it off early, and investing additional money outside of retirement accounts, working toward the multiple goals at the same time. Step 7 is financial freedom. The goal of financial freedom is retiring and actually having something to leave as a legacy, be it through an inheritance to your children or some nice gifts to organizations that you feel strongly about. Retirement also means that you have more time to give to endeavors that you feel really, really passionately about.
The story of Matt Mitchell, the car salesman that Dayton counsels, is woven throughout the book. Dayton himself has basically donated his time as a personal finance coach for decades, so he discusses how he walked his pupil through the steps toward financial freedom. I liked how this book showed that you can focus upon more than one thing at a time because compounding is an important and powerful aspect of investing. This is actually not as common in personal finance advice as you might think. Those who start with just saving a few bucks regularly early in life will actually be better off than those who save up more of their income later in life.
I also liked the argument for having a single earner for many couples. After paying for child care and additional clothing, food, and transportation expenses, Dayton shows how one working wife earned an effective wage of $0.64 per hour on $18,000 of gross earnings over the course of a year. Many people don’t look at it this way, but it’s the rationale we used when my wife decided to stay at home with the kids. Low real earnings like this are also all too common. Overall, Your Money Map did a good job of showing how disciplined people can achieve financial independence over time. If you’d like to check out this book and read it for yourself, I’d encourage you to scroll up and click the link near the top of the page.
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