Sunday, November 28, 2010


How many of you have been reading the new site posted by the Toronto Star?  I know Krystal over @ Give Me Back My Five Bucks posts on the blog there frequently, however I tend to think she’s one of the few there with the experience and know-how to post insightful blogs that people can utilize and learn from.

I’m not trying to negate the fact that moms who post don’t know how to save a buck or stretch a family budget, I’m just simply noting that their tips and experience doesn’t really relate to the younger, internet and blog saavy readership that attempts to capture.

Let’s dissect this post here from Adam Goodman.  Have a read thru, and I’ll bet you’re hard pressed to find any innovation whatsoever, or anything of true merit in his post.  It’s the same old dribble that we’re used to hearing.

The post starts with the title ‘How I Saved $7,000 Painlessly’.  Intriguing, no?  Who wouldn’t like a list of ways to save $7,000 without cramping their style too much?  WRONG.  The premise of his whole post for ‘painlessly’ saving $7,000 is this: you should pay yourself first before paying your debts. 

Hrm? Come again now?  He says in one of the last bits of his post that his savings account is $7,000.  However, he had student debt when he first graduated which he struggled to pay off.  Now, I don’t know about you, but I’d much rather maintain a small emergency fund and use any excess ‘reserves’ to pay down that debt.  Unless my savings account has 12% interest, it’s not worth the trade-off.  That’s a few thousand {or even hundred…} dollars that could have been much better utilized.

He says it was painless to save the $7,000, but I think that when you muse over debt and are up at night thinking about money issues, it entirely negates the pain.

{Disclaimer: I’m all for an emergency fund, however I sure wasn’t socking away $100 per month when I was in major debt and wanted to get out.  I did it in small increments and stopped at $1,000.}

Let’s look at an example:

Using what Mr. Goodman professes, we’d be saving $100 per month for a year.  With a simple calculation of compound interest, that means we’d be making roughly $188 per year and growing our deposit to a mere $288.  I’m out of debt now, so $188 is great, but when I had big debts to pay, that $188 would’ve gone a long way! It’s not much when you consider a debt of $5,000 or more, where the monthly interest amounts to about half that total yearly savings.

For example, let’s take a calculation of someone who’d be in roughly $7,000 debt and it will take almost a year to pay off:

Without the $288 the debt payoff would look somewhat as follows, using a roughly 7.5% interest rate on the debt and it would be paid off at the beginning of June:  

With the $288 {applied to the last payment, considering it would take roughly a year to compound the interest – I know, I know, it’s JUST an illustration of a point, not what would be really earned in the time frame}, the debt is cleared almost an entire month earlier.  And this is without consideration of any snowballed funds towards the debt.  To me being clear of that debt a month earlier means far more than the $288 opportunity cost:

Moral of the story:  Adam Goodman, your ideas idea sucks.  Congratulations for being out of student debt.  But if you want to expand your horizons a little, think outside the box and create real savings tips.  Most normal people who are struggling on limited incomes and wanting to payoff debt can think of way better things to do with $100 per month. – perhaps you should reconsider who you allow to blog on your site {not you, Krystal – you’re great} and ensure the blog is a real PF blog and not just some site where anyone with a savings account and a computer can post.

Feel free to share your opinions in the comments below.  But note, please, that any hateful comments will not be approved :)


*Canadian Girl


  1. I only read Moneyville because of Krystal. I find a lot of bloggers either don't have experience or the personal touch in really having lived through getting out of debt or whatever else, and people get paid by the blog post, so they see $$$ in their eyes.

  2. I sent the editor of Moneville my thoughts about some of the posts and pure lack of good information. I recently wrote a Financial Literacy Manual and I am finding that many Moneyville's posts lack sufficient information for the reader. For example, there was an article about phone companies and having to read the contract carefully or beign careful when agreeing to something over the phone. The writer did not inform readers that their rights are protected by the Canadian Consumers Rights Act and can file a complaint with the CCTS.

    I saw a posting today about how to be a frugal dater - but the suggestions where just dumb. I hope the writers improve because Canadians lack financial literacy and our debts are increasing.

  3. Thanks FB and Elizabeth - I'm glad to see that I'm not the only one who thinks the {with the exception of the select few!} is generally hokey.

    Canada in general, not just our youth, needs a true, financial literacy lesson and certainly isn't it!

  4. Elizabeth - I wrote that frugal dating article. What suggestions did you think were dumb? I thought all of the ideas were at least interesting, fit the theme of winter dating, and all cost less than $20.