I recently had the chance to catch up and interview one of our One Money Design writers, Danny Kofke, who recently published his second book: A Simple Book of Financial Wisdom: Teach Yourself (and Your Kids) How to Live Wealthy with Little Money. Danny has provided a real gem for people in writing this book. I was privileged to read an early release copy. It lives up to being a simple book that anyone can follow to learn how to live on less and manage their money wisely.
Your first book, How to Survive (and Perhaps Thrive) on a Teacher’s Salary did very well. Why did you decide to write another book?
How To Survive was basically Tracy’s (my wife) and my story on how we got to the point where we were able to raise a family on a teacher’s salary. I actually started writing this book in 2005 (it was released in 2007) and, at this point in time, we had just one daughter and Tracy had been a stay-at-home mom for one year. In addition, with the title being what it was, my book was targeted towards teachers. I think the information in it could help others as well but I definitely had teachers in mind while writing it. Fast forward 6 years and we now have two daughters and Tracy has remained at home. I just felt that I had much more information to share since we have learned so much since my first book came out. In addition, many are struggling right now and I wanted to be able to help others from all walks of life. Whether you are a teacher, a CEO, a cashier or something in between, I feel “A Simple Book of Financial Wisdom” can help you achieve financial success.
I found the book to be easy to understand and practical. You and your wife are obviously disciplined when it comes to managing your finances. What keeps you sharp and how do persevere so well?
Our financial success is due in large part to two things – communication and planning. We constantly discuss our finances with each other to make sure we are on the same page and working together. I have talked to couples that are going in complete opposite directions which makes managing money so much more difficult. If one partner saves everything he/she earns whereas the other blows his/her entire paycheck there will probably be some trouble in their futures. In addition, we have goals and plans when it comes to our money. If I were going to drive from Georgia to New York, I would consult a map to make sure I get there. The same thing holds true with money. You have to have a destination/goal in mind to achieve success with your finances.
People who make a lot of money, or little money always experience financial challenges at one point or another (an unexpected car problem or medical expense). What’s your secret to overcoming them?
There is where the emergency fund comes in place. If you own a house long enough something will need to be fixed. If you drive a car long enough something will need to be replaced. This is why we need to prepare for these events. Having an emergency fund in place can turn a potential catastrophe into an inconvenience instead.
You tell people to take control of their finances and also provide some practical tips for doing so. What’s the most important thing people can do to take control of their money so it doesn’t manage them?
I think the most important thing people can do is to know how they are spending their money. Their are two ways to make more money – get a higher paying job or cut back on what you spend. It is possible to get a higher paying job but, let’s face it, it is a little more difficult now than it was five years ago. That leaves us with Plan B – cutting back on what we spend. Many of us have areas in our lives where we overspend. I recommend tracking your spending for one month so you can get an idea of where your money is going. You can then cut out those things that you truly do not need.
I like that you provide a chapter on continuing to educate yourself about finances. I know many people are busy with family and life. Can you share some ideas without giving too many tips away? For example, should we try to read 1 book a quarter, a magazine article a month, etc.?
I think all of the above. Many people claim they have no time to educate themselves yet find time to watch The Real Housewives or keep up with the Kardashians. I am not saying these shows are bad but many of us do have the time to learn more about money (or other things) but choose to watch tv or do something else instead. I feel one should aim to read at least one book per month that will help him/her improve his/her life in some way.
In reading the book it seems you and your wife are on the same financial wave length which will have a direct impact on how your children manage money one day. How often do you and Tracy talk about financial decisions. Is there a good time you find to do so during the week?
Tracy and I don’t have a scheduled time to discuss our finances – it usually comes up a couple of times per week. I think this constant communication has greatly enabled us to have success – we are always on the same page working towards the same goals.
Our job as parents should be training our children and I’m glad you included a chapter on children and finances. I’ve found it requires a lot of discipline to teach my children about finances. It takes some work and making it a priority. Can you share a favorite tip from the book on giving your children a financial education?
I think the most important thing is to be open and honest with your children concerning money and financial issues. We talk openly about how much money we make each month and what this money has to go towards first (contributions, mortgage, electric, etc.). This way we show our kids that we have to pay for certain things first and then, with the leftover money, we can buy/do things that are not needs. In addition, I always try to place a value on something based on the number of hours I would have to work to purchase it. For instance, Ava (my 7 year-old) recently came home saying she wanted us to get an I-Pad. I told her I would love to buy one but I would have to work an entire week to pay for one. By doing this at a young age I want her to see the correlation between work and money.
A Simple Book of Financial Wisdom: Teach Yourself (and Your Kids) How to Live Wealthy with Little Money is now available on Amazon.com.
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