Don’t Give Up Until You Do The Math


In the time I’ve been doling out personal finance advice online, I’ve been called everything from privileged and out of touch, to colorful names I will not repeat. I know I don’t have the soft touch many other personal finance gurus have. But I have to be harsh with you because you need to know the truth. 

If you do not get your financial shit together, you will not be okay.

If you do not aggressively save for retirement, you will not have enough money saved to leave the workforce on your own terms and live comfortably. If you do not pay off all your debt as fast as possible, you will not have the flexibility and security of keeping every dollar you earn. If you do not set aside money for emergencies, you will not be ready to deal with what life throws at you. And life will throw many things at you, and a handful of them will be horrendous!

Money is really important. The quality of your life literally depends on it. And you’re the only one looking out for you!

But the painful truth is I cannot make any of the above easy for you

I can tell you how to do it and I can give you motivation and inspiration, but I cannot lighten the load. I cannot reduce your debts, earn you more money, or increase your investments.

You have to do that part.

Getting your finances on track is not easy.

Getting your money under control is not easy at all. That’s actually why most people don’t do it.

It is far, far easier to buy a house you cannot really afford, finance a car with a 7-year loan, make the minimum payments on your student loans, and use credit cards to fill in the gaps, all while promising yourself you’ll start saving “later”.

That’s what most people do. Don’t be most people.

You can save $25,000 for retirement in less than 5 years.

When I first started saving and investing, $25,000 was the threshold that my money really started to make money. It was at this point that the stocks and ETFs I bought were producing enough dividends to buy more stocks and ETFs. My nest egg was suddenly growing on autopilot. I realized that even if I stopped contributing, I would probably be ok. Tuck $25,000 in your TFSA and $25,000 in your RRSP and you’re truly set. 

In the grand scheme of things, $25,000 is a shockingly low number to establish financial security. At the same time, it can seem an impossibly large sum when you’re in your twenties. However, it’s easier to save than you might think!

When you look at that number, you probably assume that to save $25,000 in 5 years you have to save $5,000 per year or about $417 per month.


If you invest that money in the stock market and earn an average rate of return of 5%, you only need to save $368 per month. This saves you just shy of $50 per month, or nearly $3,000 over the 5 years. Yes, you read that right! $3,000 of your $25,000 retirement savings is going to save itself. So you don’t have to save $25,000, you only have to save $22,000.

Don’t think you can earn a consistent 5% return? Fine. Find 3% and you only have to save $387 per month. It’s still $30 less per month than you thought!

You can save up a 3-month emergency fund in less than 1 year.

Some people think you need to save 3 to 6 months of your gross income as an emergency fund. This is a wonderful idea, but largely impractical in your 20’s and 30’s. You should, however, have at least 3 months of essential expenses on hand.

How do you know how much this is? Make a list of all the things you spend money on over the course of a month. Now, cross out anything that isn’t a necessity. You’ll be pleasantly surprised to find you don’t need very much. You’ll also probably be somewhat shocked at how much you spend!

If you were without income, you would still need to pay for housing, utilities, food, and your cellphone, as well as make the minimum payments on your debts. But that’s it. You do not need to put money into savings when you don’t have a job. You can apply for forbearance on your student loan payments. You will not go out with friends.  You literally will live on the bare minimum.

These are your essential expenses. I would guess they’re somewhere around $2,000 or $3,000 per month. Multiply it by 3, then divide by 12. That’s the amount you have to set aside each month to accumulate a 3-month emergency fund in less than a year. If you cannot save up a 3-month emergency fund in one year then your home is too expensive and/or you cannot afford your car and/or you can’t differentiate between “needs” and “wants”. Explore each category ruthlessly, then cut out whatever is holding you back.

Stop making excuses for yourself. You cannot afford excuses.

You will probably pay off your debt 3-5 years faster than you think.

A weird thing happens when you start focusing on paying off your debt: it goes down faster.

Why? Because once you want to get to debt-free, you start to look for any way that will get you there ASAP. You’ll take your lunch to work to avoid buying it every day. You won’t spend your income tax refund on a vacation. You’ll put off replacing your laptop or your cellphone until it actually doesn’t work anymore. You’ll put every extra penny you have towards your debt because you’ll know that every penny counts.

When I was paying off my $21,000 of student loan debt, I didn’t think I’d be debt-free in less than 2 years. In fact, I was merely hoping to cut my 10-year repayment term in half and pay off my loans in 5 years. I remember I felt so proud of putting a measly $300 per month towards the balance!

Once I got going, however, I made the ultra-aggressive plan to get to debt-free in 3 years. But by the end of it, I came in 14 months ahead of schedule, paying off my debt completely in less than 2 years. This means that when all was said and done, my average payment towards my student debt was more than $1,000 per month. Who knew I had that much to spare? I didn’t until I had already done it!

Work out the math before you quit

When it comes to a financial goal that seems absurd and unachievable, don’t discount it until you actually break it down into tiny monthly or weekly steps. Even then don’t discount it until you’re certain there are no possible shortcuts.

Just as you will sometimes be let down and laid off, you will sometimes move up in your career. Just as you will sometimes lose money to carelessness or bad investments, you will also sometimes receive unexpected raises, bonuses, and inheritances.

In fact, most of the financially defining moments of your life will probably catch you by surprise. This is just another reason why it’s important for you to manage the variables that are in your control!

You become more powerful when you focus on your goals. Everything is easier to achieve once you start moving in the right direction.  Remember, you only have to do one thing right with your money at a time. Because you really do. Just one thing.

But you have to do it. Or at the very least, you have to try. Because you won’t be ok if you don’t.

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19 Comments. Leave new

  • I try so hard to be cognizant of why when I tell myself I can’t do something. We are our own biggest obstacles a lot of times. And I used to be really good at standing in the way of myself. While I can’t say I have ever been called colorful names, I did get a little bit of pushback for posting something called can’t versus won’t. But I stand by it. A lot of times we–myself included!–are simply refusing to acknowledge the possibility. We haven’t been defeated. We haven’t even tried.

  • Totally agree with this post. It’s so easy to make up excuses for why something can’t be done. Really, all you have to do is buckle down and look at the things you can do to achieve your goals.

    You see this alot whenever people write about their debt payoff stories. People will protest and claim that they can’t do it because they have to pay too much in rent, or they can’t live on less, or whatever myriad of reasons they give. The thing is, we’re a product of our choices. We choose the decisions that put us in the positions that we are.

  • You’ve always had a way of making an abrasive writing style work I totally dig it.

    I agree with Penny and Financial Panther. I hope people listen to you, because it’s so important.

  • I have to say, I don’t think you’re out of touch at all, and I like that you don’t have a soft touch!
    I recently discovered your blog and have been going through the archives. I just read your post from 2014 (I think?) about how financial literacy doesn’t fix everything. To me, that post (and others) are exactly the opposite of out of touch or an example of unchecked privilege, which I do think is often really common in personal finance.
    You recognise that you have privilege and that some other people are in really tough situations.
    And yes you advocate for hard work and explain what that looks like. To me, that’s recognising that the world is unfair and should be different, but if we want to make in this unfair world, here’s how that can be done. As long as we continue to recognise that some people are thrown curveballs that we can’t even imagine, and do what we can to change the unfairness of the world (by who we vote for, for example), I have zero problem with that.
    Anyway I’ve really been enjoying your posts, so thanks!

  • People are cray… Keep spreading the word!

  • Debt Free, Finally 🙂
    October 12, 2016 8:28 am

    You are the reason I started my debt repayment journey 10 months ago. I was ~$15000 in consumer debt in December of last year when I stumbled across your blog. I started at the beginning and read every blog post. You were not all sunshine and roses when it came to your own struggles with debt repayment and your writing style reflects that. I really feel that your “real talk” attitude helped me in my journey. When I struggled with throwing my tax refund cheque or 60% of my paycheque towards a credit card balance , I re-read some of your posts. Today, I am now consumer debt free, have a 4 month emergency fund saved, plus I’m saving for retirement in my TFSA and RRSP accounts.

    Thank you, Bridget for your no non-sense style because it was exactly what I needed to get myself out of debt.

  • I think what you’re doing is amazing. People get upset because they think everything should be easy, they don’t want to sacrifice anything but still expect to get everything they want. Now a days you need to be harsh and upfront about this stuff. Everyone needs to open their eyes and see the mess that this debt is making for their future selves.

    It was your blog that forced me to look at my finances. In the last 12 months I have done more than I thought imaginable. Not only have I saved a $6,000 emergency fund, I’ve paid off almost all my debt, nearly $23,000, with only $5,200 to go before my goal date of December 31, 2016. Without this blog and your no-bull shit way of stating the facts, that would have never happened. So Bridget, I thank you. Thank you for not sugar coating the facts and thank you for helping me get my financial shit together so that I will be okay!

    You are an inspiration!

  • You are the financial kick in the pants everyone needs. I have been reading your blog for three years and I would have never got my financial shit together if it weren’t for you. I was inspired to get a higher paying job, take full advantage of employer benefits, and am now on track with a retirement, emergency, education, and travel fund. I’m also in the stock market and don’t feel overwhelmed, thanks to your MasterClass Money Program. So THANK-YOU Bridget, you have changed my life.

  • Whoever is accusing you of only doing well only because of privilege didn’t take the time to read your story! You’ve worked hard to get where you are and you’re an inspiration not to settle for the average in personal finance (because the average is really not OK).

    I’ve seen the same attitude in terms of grades in undergrad. I did well and people always seemed unhappy about the recommendations I made (‘go to class and study every week, even when there isn’t a test? Start assignments as soon as you get them? That’s crazy and it’s totally unreasonable to expect that much work for an A!’) It truly comes down to wanting reward without effort.

  • Fantastic post, thanks! Will be sharing with my groups!

  • The power of math is always surprising to people. 🙂

    I think the most important lesson here is to kick excuses to the curb and understand the amount of money you need to actually LIVE is quite low.

  • I really enjoy your honest and blunt approach to personal finance. I am looking to improve my finances and found your concept on the emergency fund quite interesting. I am going to do it!

  • Good post (along with the original 30 by 30 list)! I agree this may not be attainable for those with extenuating circumstances, but these are definitely desirable and achievable goals for most grads. I’m in my early 30s now and completed all these goals by 30. I feel fortunate that I did, as my wife and I had our daughter when I was 30 and dropping one income (my wife is staying at home right now) plus the additional childcare costs are currently stretching our finances somewhat.

    In my 20s, it seemed the mainstream sentiment among our friends was to enjoy yourself now and worry about financial responsibilities later in life, but I think this is horrible advice. You’re just back-loading stress! We were by no means frugal coupon clippers and would enjoy fun nights out and a couple nice trips a year but we always paid ourselves first and made a big push to increase our incomes before we hit 30 by getting our CFAs while working full time and then switching to higher paying jobs (which involved moving to Asia from Canada as well). As Bridget has mentioned, doing the heavy lifting up front just gives you more options and less stress when you’re in your 30’s. It’s not really something to argue over, just a fact that you should know in your 20’s so you can make educated decisions on your finances.

    I want to encourage my fellow millenials to get away from the victim mentality that is so prevalent across comment sections. If a goal is really important, you gotta push yourself to achieve it through intentional action. No one is going to give it to you. Good luck everyone!

  • Love the can do sentiment here.

    A commenter once left the most bizarre (I thought) comment on emergency funds and bare bones budgets. She kept counting ‘savings’ as a budget item in her bare bones/unemployment budget. To me, it was like – if you’re *living off* savings how can you possibly be ‘saving’? You’re ‘saving’ money you already saved? I get what she was trying to say/do, but…


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