[Front Cover of Spend Smarter Save Bigger]

Margot Bai, the author of this new book kindly agreed to send me a copy for review. The idea behind the book is to show people how to save money by spending smartly on their biggest expenses like a home or a car, unlike other popular books that suggest that you should cut out small expenses like a daily latte.

Ms. Bai covers an astonishing range of topics in her book ranging from safe driving habits (reduces chances of collisions and results in lower automobile insurance premiums) to relationship advice (divorce has a devastating effect on finances too) to tips on getting lower premiums on life insurance (I wish I had known this when we obtained our life insurance). The book is targeted at a Canadian audience and its 297 pages are packed with practical advice.

The author gets extra points for offering, in my opinion, excellent investing advice. She discusses couch potato portfolios, stresses the importance of reducing costs and talks about low-fee mutual fund options. For example, to folks who are not comfortable investing on their own and would like a bit of handholding, Ms. Bai offers this advice:

By investing directly with a particular fund company, you can invest in a great mix of low fee funds that pay no commission and gain access to free, unlimited, expert advice on managing your investments!

The book is well-written, easy-to-read, provides sound financial advice and deserves a spot on the best-seller list. I recommend it highly and I am replacing The Automatic Millionaire with this book in my Recommended Reading Page. You can purchase the book for $20 plus shipping and handling from the Spend Smarter website or at a discount from Chapters.ca (non-affiliate link). The table of contents and a chapter summary are available here.

This article has 21 comments

  1. Excellent review and I’m especially glad to see a book that does not want me to cut my lattes :-)]

    You’ve just convinced my to get this book (at least at the Ottawa library for now).

  2. … note to Margot Bai: but I’ll buy it if I really like it 🙂

  3. I fully agree with this method of saving on the BIG stuff. I see a lot of people rushing out to a department store or grocery store daily/weekly for their whole life to buy some $30 items for $25…
    Just think… if you can save $40,000 by getting a real estate deal, you can basically never worry about the price of general consumables for the rest of your life. Or if you buy that $30,000 car instead of the $40,000 one – you are set. I don’t believe in wasting time cutting out dollar coupons, or waiting in a long line of cars to fill up when the price of gas is 79 cents instead of 81. One must factor in their time and their sanity…

  4. Great review. Glad you could get a copy from Margot as I put in that suggestion between the two of you. I have also found it to be a great book and it really is a good read – also a great resource for so many different areas where one spends money. Margot is a personal friend and I know she will do well with this – keep spreading the word!

    Also glad to have found this blog a little while back as it also has great content and all of this just in time for tax season and my considerations for RRSPs and other possible action items.

  5. This looks like a really interesting book. I’ve always thought the whole “stop spending $10/day on latte” strategy was a bit off…how many people actually spend that much on lattes?
    One point on a previous comment regarding lining up for gasoline/clipping coupons – I agree that this behaviour is not beneficial enough for the time involved (unless you have a lot of time) which is why I don’t do it. I think it’s important though to separate actions which can save regular future amounts of money (however small) which may end up being big savings, from the one time only payoffs (cheap gasoline). For example if you spend an extra 20 minutes getting cheaper gasoline to save $3 then you get a one-time only benefit of $3 for your 20 minutes of effort. A future savings example is if you switch your chequeing account from a big bank to a no-fee account and save $10/month in fees then you get a recurring benefit of $10/month. The problem is that $10/month doesn’t strike me as a huge deal and I might be tempted to not bother switching or maybe put it off for a while. If you are trying to figure out if creating a small recurrent savings is worthwhile then I would suggest that it’s a good exercise to calculate/estimate the present value of the future savings in order to put the savings in a context which is easier to understand.
    I did a rough calc on $120/year savings for 7 years discounted at 3% inflation and the present value is approx. $750. If you assume the savings will last longer then that amount goes up (~$2100 for 25 years). This is important because it shows that although you might end up spending a number of frustrating hours getting the accounts switched over – it is probably worth it based on the present value of the savings which is not that apparent when just looking at the monthly savings. I just used the cheq. account example because I’ve seen a number of posts regarding that topic but obviously there are many similar examples that could have been used.
    You could also use this analysis on the fictional latte example and come up with a pretty impressive present value but the problem there would be that you would have to give up your morning latte which might not be worthwhile if you really enjoy them. With the chequing account example I’m assuming there is a one-time effort in terms of setting it up and then no more extra effort is required after that.

    Disclosure – I don’t have a no-fee chequing account (yet) and I rarely drink lattes (perhaps 4 per year?)

    Mike

  6. Canadian Capitalist

    Mike: Great point about saving on recurring expenses esp. if it has no impact on your lifestyle. Chequing accounts are a very good example because it beats me why most people want to pay $10/month for the privilege of a bank account. Other examples include saving on long distance, cell phones, internet etc.

    I think of every $10 recurring savings as an imaginary dividend payment. If you think of the yield as 3%, every $10 monthly savings will be like having a $4,000 portfolio. Find three such expenses and you’ve just become $12,000 richer 🙂

  7. Canadian Capitalist

    Dennis: Thanks for your heads up about Margot’s book. As I noted in the review, the book is an excellent resource and I am sure it will do very well.

  8. a good example of recurring savings is using Skype for long distance calls: I’ve paid 18$CAN (special 50% off price until tomorrow!) for a year of free unlimited calls in North America. As I’ve said in my blog before, the quality is not always equal but they keep getting better and it seems really better since they’ve ended up their very popular free trial.

  9. I like your analogy of the $10 recurring savings being an imaginary dividend payment. I think this way every time I use my Capital One 1% cash back Mastercard. I got this card in July after reading about it in Money Sense. I started putting every purchase on this card. Then they sent me free personalized cheques that I use to pay for things like property taxes, car insurance, home repairs, down payment on my new car, etc. These cheques show up on the mastercard statement with no fees. It beats paying TD for new cheques every year. Basically, everything my husband or I buy in a month is charged to this card. We then pay the balance in full every month. This results in about $35 cash back on average per month. This is tax free money, unlike the interest on the money sitting in my Altamira Cash Performer Account and my husband’s ING Account which I figure about 40% goes to the government when we do our taxes. Another benefit: My dad said he would never get a card with Capital One because he finds all their credit card application forms in the mail and phone calls so annoying. I told him, that once you get a credit card with them, they stop harassing you to get one!

  10. Hello All!

    Thanks Ram for your flattering review and posting my book on your Recommended Reading page. Yay, I bumped Bach – that is quite a compliment!

    My thoughts on small savings are they are most beneficial for those just starting out. When you don’t have many big expenses, there are fewer opportunities for big savings. Plus the lower your income, the more meaningful small savings are.

    As our income and expenses grow, keeping big expenses under control is the key to saving effectively. With homes and cars, this means having reasonable expectations. But big savings also come from understanding the options and finding low cost alternatives when it comes to mortgages and investments. So, if we combine an affordable lifestyle with smart choices on financial services, we can really boost our savings.

    Note to CMBR (first poster) – if you can find my book in a library, please let me know! Unfortunately, distribution of my book is delayed. Other than a library and Stratford and an independent bookstore in Orillia, the only place I know of where you can get my book is from my website: http://www.spendsmarter.ca

    On the plus side, shipping is cheap, I pay the tax and I mail it right away plus I autograph all copies I send out. Thanks to the two people so far who have already ordered my book as a result of this review. :o) I really appreciate the support.

    Blessings,
    Margot Bai
    http://www.spendsmarter.ca

  11. Sounds like a great book to read. Margo: I found your book in Edmonton Public Library but from 4 copies total in all locations no copies currently available.

  12. So, what is the mutual fund company that lets you invest RRSPs directly with them? I thought one always had to go through an agent.

  13. Canadian Capitalist

    Terry: A few fund companies like Philips, Hager and North allow you to invest directly with them and have a good line-up of low-cost funds. They also don’t pay a trailer fee, so very few agents will recommend them.

    Link

  14. Margot, that’s a good point about younger people benefiting more from small savings however some older people could be in the same boat if they overdo it on their house and renovations (not that I would know anything about that…).

  15. Pingback: Canadian Capitalist » Interview with Margot Bai - Part I

  16. Hi CC,

    A good review on the book “Spend Smarter, Save Bigger” going to read those 2 parts of the interview.

  17. Pingback: Contest Winner for a Free Book “Spend Smarter, Save Bigger” - Million Dollar Journey

  18. Pingback: Christmas Gift Ideas

  19. Pingback: Our Top Ten Money Saving Ideas

  20. Pingback: Finding a Financial Advisor, Part 1

  21. Pingback: Best of April 2009 and Giveaway | Canadian Capitalist