Margot Bai presents her real life experience and resulting wisdom in ‘Spend Smarter Save Bigger’. While all the suggestions are sound and reasonable, I found we were already doing them!
But her advice is a good reminder and her surprising use of Biblical quotations chapter-by-chapter provide an excellent guide-post.
In Chapter 1, one of the more valuable points is to realize what you are chasing after or where you’d like to be headed. So, try this short prioritization assessment (what’s most important to you and why).
Rank these in order of importance to you:
___Security: knowing that I will always have a home, food and a caring community.
___Freedom: being confident that I have the means to pursue any dream I choose.
___Relationships: feeling better connected to my family and friends.
___Variety: filling my days with a blend of activities to create a healthy, balanced life.
___Independence: determining my own path without needing the support or approval of others.
___Personal Growth: learning new things and sharpening my skills.
___Charity: reaching out to others in need with love and practical assistance.
___Fun: feeling happiness and excitement through activities I enjoy.
___Adventure: seeking out new experiences that may include taking some risks.
___Relaxation: taking each day at an easier pace and reducing stress in my life.
Next, take your top three and explain why they are important to you.
Then assess the desired from the reality and make changes/spend money in ways that will move you to your goals.
Chapter 2 – Other people’s money (debt)
“He who loves pleasure will become poor; whoever loves wine and oil will never be rich.” Proverbs 21:17
*Good debt is debt that acquires you something after its end, bad debt is debt spent to acquire consumables.
Chapter 3 – Choosing Financial Freedom
“One man pretends to be rich, yet has nothing; another pretends to be poor yet has great wealth.” Proverbs 13:7
*Take a week off shopping and check your withdrawal symptoms.
Chapter 4 – Taking Care of Business
“Blessed is the man who finds wisdom, the man who gains understanding, for she is more profitable than silver and yields better returns than gold.” Proverbs 3:13-14
*Get knowledgeable and perform financial services (such as planning) for yourself.
Chapter 5 – Budgeting Made Easy
“Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it?” Luke 14:28
*Plan savings with the following formula:savings = income – fixed expenses – monthly expenses – irregular expenses (gifts, education, vacation, furniture, appliances, computer, medical, new baby stuff)
Chapter 6 – Two are Better Than One
“Two are better than one, because they have a good return for their work: If one falls down, his friend can help him up. But pity the man who falls and has no one to help him up!” Ecclesiastes 4:9
*Talk together about your life goals. *hugs*
Chapter 7 – My Financial Story
“He who ignores discipline despises himself, but whoever heeds correction gains understanding.” Proverbs 15:32
*Hey - we all need a little help out of the pit.
Chapter 8 – The Big Savings Start at Home
“A wise man… built his house on the rock. The rain came down, the streams rose and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock. Matthew 7:24-25
*Buy instead of rent, provided you have the money and can get a mortgage you can trust.
Chapter 9 – Mastering Your Mortgage
“The house of the righteous contains great treasure, but the income of the wicked brings them trouble. Provers 15:6
*Repeatedly locking in at the 5-year rate will cost you more than repeatedly locking in at the 1-year rate.
Chapter 10 – Preparing for the Unexpected: House and Life Insurance
“The plans of the diligent lead to profit as surely as haste leads to poverty.” Proverbs 21:5
*Go term and skip what insurance the bank offers for mortgage insurance.
Chapter 11 – Driving Down the Cost of Driving
“Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.” Why, you do not even know what will happen tomorrow!” James 4:13-14
*Driving a reliable vehicle for its entire useful life will provide the best long-term value on vehicle ownership.
Chapter 12 – Choosing the Right Vehicle
“Watch out! Be on your guard against all kinds of greed; a man’s life does not consist in the abundance of his possessions. Luke 12:15
*Research and pay cash for a better deal.
Chapter 13 – Keeping Your Vehicle on the Road
“For we brought nothing into the world, and we can take nothing out of it.” 1 Timothy 6:7
*Young drivers can save on insurance by buying an older vehicle and only getting basic insurance.
*Find a mechanic you can trust and go for refurbished parts.
Chapter 14 – Save Driving, Healthy Savings
“Folly delights a man who lacks judgement, but a man of understanding keeps a straight course.” Proverbs 15:21
Chapter 11 – Driving Down the Cost of Driving
“Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.” Why, you do not even know what will happen tomorrow!” James 4:13-14
*Driving a reliable vehicle for its entire useful life will provide the best long-term value on vehicle ownership.
Chapter 12 – Choosing the Right Vehicle
“Watch out! Be on your guard against all kinds of greed; a man’s life does not consist in the abundance of his possessions. Luke 12:15
*Research and pay cash for a better deal.
Chapter 13 – Keeping Your Vehicle on the Road
“For we brought nothing into the world, and we can take nothing out of it.” 1 Timothy 6:7
*Young drivers can save on insurance by buying an older vehicle and only getting basic insurance.
*Find a mechanic you can trust and go for refurbished parts.
Chapter 14 – Save Driving, Healthy Savings
“Folly delights a man who lacks judgement, but a man of understanding keeps a straight course.” Proverbs 15:21
*You can always improve your driving just a little bit.
Chapter 15 – Investing Basics Every Saver Should Know
“A simple man believes anything, but a prudent man gives thought to his steps.” Proverbs 14:15
*Lots of good info here; needs a good digesting.
Ref: http://www.tdefunds.com/ - TD Canada Trust e-funds (Invest online in index mutual funds with some of the lowest fees anywhere in Canada)Ref: http://www.asldirect.com/ – ASL Direct (learn more about mutual fund MERs, load and trailer fees. Access their free online directory to discover the trailer fees paid to advisors by different mutual funds.Ref: http://www.moneysense.ca/ – MoneySense Magazine (fairly unbiased personal finance information for Canadians)
Chapter 16 – Easy Investing Alternatives to Grow Your Savings Faster
“Plans fail for lack of counsel, but with many advisers, they succeed.” Proverbs 15:22
*More goodies.
Ref: http://www.cfp-ca.org/ – working with an advisor, ethics, standards, and personal finance
Chapter 17 – What are RRSPs Really For?
“In the house of the wise are stores of choice food and oil but a foolish man devours all he has.” Proverbs 21:20
*Be in it for the tax-sheltered compound growth – (reinvest the gains).
*Though Bai is high on RESPs, the restrictions are still too limiting for a measly for 20%.
Ref: http://www.hrsdc.gc.ca/ - RESPs
Chapter 18 – Saving Money and Helping Others
“He who pursues righteousness and love finds life, prosperity and honour.” Proverbs 21:21
*There is nothing immoral in controlling more wealth than someone else: our moral responsibility is to use our wealth wisely and help others.
