Thursday, January 21, 2010

Book Review "The New Frugality"

Chris Farrell's "The New Frugality: How to Consume Less, Save More, and Live Better" uniquely offers advice on how to live frugally. It's set in the historical context of our recent economic crisis. The author provides some explanation of how the Great Recession came about, as well as interesting historical references, especially to the Great Depression for comparison.

In giving financial advice, the author doesn't treat us like irresponsible children as some other authors of financial advice might. For example, he doesn't say that you should never use credit cards and use only a debit card. Rather, he offers an example of how some credit card companies offer nice rewards, and you can use credit cards only if you know you can pay off the balance in full each month. Similarly, while he says term life insurance policies are more cost-effective than cash value plans such as whole life, universal life, etc., he doesn't actually say to avoid these cash value plans. Instead, he writes, " value insurance can be an attractive option for those people who still have money left over after contributing the maximum into retirement savings plans and adding to their already hefty savings accounts." In other words, no one. I got the distinct feeling that he has at least one close friend who makes a living from selling whole life policies. Or maybe that's his sense of humor coming through.

My favorite is his discussion of college savings, which he keeps very succinct. He narrows our choices by steering the reader toward the 529 plan and describing the Coverdale as outdated and the UGM act as losing control of your money. He describes financial aid and student loans so quickly and clearly that I no longer dread starting to think about how soon our 12 year old baby will need help paying for college.

Unfortunately, this book was difficult to read for two reasons. First, there's the omission of words and the misuse of words, for example using "with" for "will," "you're" for "your" and even "barrow" for "borrow." I lost track of how many such errors there are. Second, the many lengthy sentences strung one after the other slowed me down and made reading a chore as I wondered when I would next encounter a verb.

Also on the negative side, several "side bars" were too long to be placed in-line with the main text. They should have been placed in appendices. Finally, there is no index, and the Table of Contents is sparse and even misleading -- life insurance is discussed in "Make Frugality a Habit," not "Live Long and Prosper."

If you're sensitive to typographical errors, or would prefer a book more focused on just financial advice, you might be better choosing a different book.

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