Every Sunday, The Simple Dollar reviews a personal finance or other book of interest. Also available is a complete list of the hundreds of book reviews that have appeared on The Simple Dollar over the years.
So, let’s be clear right off the bat. When I picked up this book, I had no idea who Elisabeth Leamy was. She is apparently the “consumer correspondent” on Good Morning America, ABC’s morning television program.
I’ll be honest: I haven’t seen Good Morning America since I was in junior high and it was on television in the morning as I waited for the school bus to arrive.
The idea behind the book is that the most efficient way to save is to focus on the biggest areas of spending in your life and make giant cuts in those areas. Leamy identifies five areas: housing, automobiles, credit, groceries, and health care.
The book is organized much like a magazine. The material is broken down into short sections with lots of little “bubble” sidebars (sometimes multiple sidebars per page). It’s one of those that you can read for a minute or an hour. Of course, at the same time, it also means that no issue is covered in intense depth.
Houses: Home of Savings
Leamy is a big advocate of buying a home as quickly as possible, even with a tiny down payment. Her argument mostly revolves around the fact that there are many more ways to save money and get return value out of a house than there is out of a rental situation, particularly when interest rates are this low.
The rest of the section focuses on ways to do just that and squeeze more value out of your home purchase. She suggests things like having your home re-appraised for tax purposes, being diligent about closing costs, paying down your mortgage early, and selling your home yourself when it comes time to sell.
Cars: The Cheaper Road
Leamy’s advice on cars is similarly straightforward. Start off by buying a car you can easily afford and pay it off as soon as you can. Of course, here the road diverges a bit. A big part of that car purchase, in her eyes, involves buying a car that is reliable and following that up by keeping the maintenance package up on the car.
The idea here is to make sure the car has a long life span for you so that you buy cars less frequently and have longer periods without required car payments. If you do that, then you can get away with just banking a little bit each month for your next car and be just fine.
Credit: Loans for Less
The advice Leamy offers on credit is pretty straightforward. One of the best things you can do for yourself is have a good credit score – and not so that you have easy access to credit. A good credit score lowers your insurance rates and makes you appear more reputable during various background checks.
How do you get there? Pay off your debts, particularly your high interest ones, and avoid racking up new ones. Make sure your credit report is clean and doesn’t have any false information on it. These tactics will put you in a better place.
Groceries: Guerilla Grocery Shopping
Most families have significant food and household costs, and some simple techniques for cutting them go a long way. I can certainly say that reducing food costs was a big part of our financial turnaround.
Again, Leamy sticks with the big tactics that work. Stockpiling (and buying in bulk). Being clever with coupons (in other words, only using coupons for stuff you already use). Using price-matching to your advantage. Identifying stores with lower prices and shopping there. Buying real foods, not processed foods. All of these tactics work for shaving dollars from your food bill.
Healthcare: Curing High Costs
The impact of health care on a person’s budget varies a lot from situation to situation. Some people have only a small health care cost, while others see it eating a significant chunk of their income. Because of the variable nature of it, Leamy’s advice is often conditional. Some ideas work in some situations, while others work in other situations.
For example, if you’re an infrequent health care user, your best bet is to simply raise your deductible, which will drop the premiums you pay on your insurance. If you’re a frequent user, there are a plethora of tactics available to you, the biggest of which is simple negotiation. Negotiate with your doctor. Negotiate with hospitals.
Is Save Big Worth Reading?
This book pretty much delivers exactly what it promises. Leamy sticks to the biggest personal finance matters and really focuses on how to cut them.
This book is great for someone who is a beginner at thinking about personal finance issues and is mostly only interested in shaving a bit of money from their current lifestyle. Leamy hits that area like a hammer.
However, if you’re looking for novel tactics or a completely new approach, you won’t find it here.