This week’s Financial Guru Review is about J.D. Roth. He’s the personal finance blogger over at Get Rich Slowly. He’s very popular in the persnal finance blog niche and has been around for many years.
His mantra for his personal finance is ” do what works for you”. He doesn’t have hard and fast rules. J.D. Roth shares some guidelines, but wants readers to see for themselves whats best for them.
J.D. Roth on Getting Out of Debt and Credit Cards
J.D. sees debt reduction as a step, not just a goal. He points out that being successful involves making incremental changes:
Rather than quit cold turkey, I think the best way to begin a life of frugality is by taking small steps. Small steps eventually become big strides, but only after you’ve developed your frugal muscles.
Like many financial gurus, J.D believes in having an emergency fund before you start reducing you debt. He recommends the following steps:
- Stop acquiring new debt: Hide your credit cards and create a spending plan or a budget, whatever fits your personality. Reduce your expenses to ‘stop the bleeding‘.
- Establish an emergency fund: Look at your expenses and see if you can ake some adjustments to increase the amount you can set aside for your emergency fund. He has an idea on increasing the barrier to using your emergency fund for frivolus reasons and oening a savings account at a different bank.
- Implement your debt reduction plan: He prefers to let his readers decide which method works for them: either a debt snowball or paying highest interest rate first.
J.D. and Building Wealth
Something fascinating with J.D. is that ,as a reader, you can follow his financial journey step by step through his blog. Now that he is out of debt, J.D. explored what to do with his money. Sharing his personal thoughts, he broke down how he is using his money to build his finances:
Once my consumer debt was repaid, that $1000 a month was available for other uses. The old J.D. would have immediately used it for fun and games. The new J.D. was smarter. I used this money to begin saving and investing, to begin building wealth. Since the end of 2007:
- Increased his emergency fund from $1000 to $12,000
- Opened a Roth IRA and a 401(k) and max the accounts out
Saving money each month is important to J.D. and he shared his views on what to shoot for:
Something that I find fascinating is that J.D.’s blog also explores avenues of personal fulfillment along with personal finances. He talks about home gardening. He has a wonderful series of posts, not just the frugality of it, but the enjoyment of it. He also has a wonderful post on affordable and great wines by Gary Vaynerchuk.
What J.D. Roth About Buying a Home
J.D. shares his thoughts on how much of a mortgage someone should budget for:
I’m a strong advocate of being conservative here. I believe your housing costs should be less than 28% of your gross income, and your total monthly debt payments should be less than 36%. These numbers provide ample room but prevent borrowers from being trapped by too much debt.
Again, J.D. stress that you should find something you’re comfortable with based on your budget. Being curious, using his thoughts, the price range we’re looking for in a house fits within his guidelines.
My Thoughts On J.D. Roth
I’m a huge fan of J.D. and agree that having a one size fits all approach is not practical. He has a great blog and his site’s forums is a wonderful resource if you have a question.
If you haven’t already, check out J.D’s and Jim’s wonderful radio show Personal Finance Hour. I’m usually in the chat room following the show as it airs. As for bloggers, he’s an extremely nice guy and very helpful to other bloggers.
What are your Thoughts?
Do you listen to financial gurus’ money advice? If so, which one? If not, why? Is there a financial guru you’d like me to review?
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