Book Review – The $1,000 Challenge

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Brian J. O’Connor, a personal finance columnist for The Detroit News, set out to answer a question for the sake of his readers following the 2008 economic crash: Could the average American family save $1,000 a month without giving up things we have all come to enjoy in this modern age, like eating?  He tackled the question in his weekly column through a 10-part series, with each part addressing a different part of his family’s budget.  He then compiled the series, with some added commentary, into a book about what he found out. Having just come from The Total Money Makeover, O’Connor’s approach feels very different.  He doesn’t call for complete behavioral change, he doesn’t have any long-term goals in mind, and he doesn’t even promise the same results for someone following his advice.  He just has a simple, one-time objective: show how his family saved in their monthly budget.

The categories O’Connor examined in his experiment were Transportation, Miscellaneous, Utilities, Kid Costs, Work Expenses, Personal Spending, Entertainment, Life Insurance, Groceries, and Housing.  Most of these will apply pretty broadly to a majority of Americans, though people like R and me won’t be able to relate to Kid Costs or Work Expenses, and my life insurance was already cheaper than his because I’m younger.  But hey, I’ll still take a savings of $700 from the other categories if he can help me do that.  For the most part, O’Connor’s advice, things like reusing school supplies in good condition from last year instead of buying new and packing lunch instead of grabbing food from the drive-through or café at work, is something that just about anyone can benefit from following.  Unfortunately though, and maybe this is just due to my Ramseyan brain-washing, I don’t feel that he goes far enough toward helping people make lasting changes in their financial lives.  For example, O’Connor’s advice on buying a car leaves me scratching my head. He suggests that you should buy a car you can pay off in three years, and drive it for five. The extra two years are spent saving, leaving you with a higher down payment next time around. His first example car costs $13,750, at $400/month. Continuing to save that money for two years leaves you with $9,600 for a replacement. Instead of paying cash for the next car, he suggests buying one for $22,600, and then touts the 44% down payment you would have as a good thing. Is a $9,600 car so unreliable that financing an additional $13,000 at his assumed future rate of 7% is necessary?  I understand that his readership is literally in Motor City, so maybe he was forced to write that chapter while the auto executives held his wife and son hostage, but I just don’t see the logic in trying to save someone $1,000 while at the same time telling them they need a $400 car payment for the rest of their life.  And in the Entertainment chapter, after complaining about how much drivel is on cable, his suggestion on saving in that area is to cut it… to basic, where you still have the worthwhile channels like MTV. He only suggests cutting cable completely in a desperate survival scenario.  Again, I’ll give him the benefit of the doubt, since the book was published in 2013, and there weren’t quite as many cord-cutting options for entertainment.  Still, between those two items alone, he could have been halfway to his $1,000 goal, and I don’t think missing out on episodes of “14 and Divorced” or driving a five-year-old Camry qualifies as living on government cheese.

The Good: O’Connor does a great job at bringing humor to a normally dry subject, and if it gets people to think about their finances, then that’s a win in my book.  He also does have some good generic advice to get the ball rolling for many families.

The Bad: The book reads like what it started out as: a series of newspaper articles.  They’re entertaining, sure, but there isn’t really much of a call to action in them.  The advice he gives in most of his sections is questionable at best, and harmful at worst.  Families that are struggling with debt shouldn’t be made to feel like they need a $15,000 car when they have $4,000 that could pay for a perfectly reasonable one until they can move up again with cash.

Buy/Borrow/Pass:  Borrow.  If you’re looking for a quick read with generic advice that will give you a good starting point without much further direction, this is a good choice.  Just be wary of the advice O’Connor gives and keep in mind that what worked for his family may or may not work for your own. If you’d like to buy it, you can do so here.

2 thoughts on “Book Review – The $1,000 Challenge

  1. Not that I’ve read the book, but I must agree with your opinion on the cars. Three vehicles we own were less than $4,000 and have lasted us several years. In fact, one of them was $600! I just can’t see the logic in advising people to even get into a car loan and have a car payment. Car payments are the worst! I’ve yet to find a frugal or financial book I can relate to in any way just based on my family’s income. Half the advice given is impossible, the other half is common sense!

    1. I thought it was especially weird given that O’Connor was writing to an audience in Detroit. Surely there’s a used car lot there? Telling someone that they can save money by only borrowing a little is like telling someone they can improve their health by only grabbing fast food for one meal a day. Sure, it’s better than what you could be doing, but why not take it the extra step?

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