This book is written by Pierre-Yves McSween who is a Montreal based professional accountant. I personally really enjoyed this book because it does not waste time with any inspirational quotes or gimmicks and jumps right into the point about managing your personal finance by bringing up the question Do You Really Need It? across various relevant life decisions: paying for insurance, buying latest tech, having points cards for stores, having children etc. If you enjoy a book which has several real-life examples of choices we make and want guidance and insight about how to think critically, this book is for you.
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Book Review
There are a total of 42 real-life scenarios in this book related to aspects of a person's personal finances. I have decided to cover 5 of the 42 components which can hopefully be translated to any readers life regardless of where they live.
I have picked out 5 out of 42 scenarios to dive deep into:
- Points Cards
- Insurance
- Marriage and Children
- Starting Early (RESP, RRSP, Emergency Funds)
- No-Gift Pact
Photo by: Maude Chauvin
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For anyone who may not know what a points card is, it is a marketing ploy which encourages you (the consumer) to shop at a specific place in exchange for a rewards system. Pierre gave an example of when his wife pushed him to go to a different gas station than the one closest to them just so they could get Air Miles (McSween, 2018, p.49). The issue was that a litre of gas ended up costing them more just to use a gas station where they could get some Air Miles (McSween, 2018, p.49). Pierre asks us (the readers) to critically calculate the need for points card as well as how much of a service or various products would you have to buy at a store or another setting just to get enough rewards translated into good amount of $ value? Let me give you an example of what I mean. There are certain grocery stores or places where I shop only few times a year and I always get asked to become a part of their rewards program but I always refuse it because I know that it is a marketing tactic designed to make us shop there more often.
When it comes to insurance, Pierre argues that people either over insure themselves or under insure. For example, Pierre specifically calls out the concept of life insurance until age 80 and argues that if a couple who own a new home take out a 25-year mortgage, they can take out a temporary life insurance for that period (McSween, 2018, p.195). The advantage here is that temporary life insurance is the cost of the premium which is much lower since insurer pays out nothing if the insured person does not die prematurely (McSween, 2018, p.195).
The third situation is more of a cautionary tale. Pierre argues that couples can sometimes end up spending absurd amounts of money for rings, parties, wedding preparations etc yet still have excessive amounts of debt, lack of financial planning for future and if the couple plans on having kids later on, it’s wise to begin investing in their child RESP account (we will look more into this later). We are usually prepared to celebrate high points of life but couples are not always prepared to set up a marriage contract in case divorce occurs. The contract lays out foundations for asset division and a living will is also recemented to be prepared in case a spouse dies.
If the terms such as RESP and RRSP confused you before, let me explain for non-Canadian readers about what those two things mean. RESP is Registered Education Savings Plan which caregivers of kids put their money into for their child’s post secondary education. The money grows tax-free while it is in RESP but once it is taken out, it gets taxed. (Government of Canada, n.d). Pierre recommends young adults to start contributing to this immediately. RRSP stands for Registered Retirement Savings Plan. The US equivalent of this is called 401k. Again, your earnings in the account are not taxed until you begin to receive payments from the plan. (Government of Canada, n.d). Pierre again recommends we start early with investing in these accounts along with an emergency fund envelope for unplanned emergencies.
For the fifth point, Pierre argues that Christmas time is filled with a overload of consumption of gifts, vacations etc and recommends shifting views by using that time to authentically spend time with family by setting up a no-gift policy and instead appreciating each others company and donating money. Pierre argues that this method will relieve a lot of stress on family members from money expenditures and lines at shopping malls.
Final Thoughts
Personally, reading this book felt like getting advice from Dad. In between the serious lessons, a lot of real-life practical examples were given with a hint of sarcasm here and there which reinforced the message. To readers who feel like the 5 scenarios I mentioned take away joy from peoples lives if they can’t even enjoy gift giving for example, Pierre clarifies this stance. The point of this book is not to shame you for your decisions but it is to help you critically decide about what do you actually need vs do you really need certain things? Of course, a person does not have to take all lessons into account diligently because financial positions can differ amongst people which is why I leave it to you to decide what is best for you.
Note: All examples directly from the book have been cited with the page numbers included. To check out the Government of Canada sources which I used for RESP and RRSP, here are the links:
RESP
RRSP
Finally, I want to give a special thanks to 
Hive account@nineclaws for suggesting I write a review of this book. Excellent choice!
