Joelle Steele's Blog - MONEY

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05/02/2022: Prevent Money Problems Before They Occur

"An ounce of prevention is worth a pound of cure." – Benjamin Franklin, 1736

Prevention won't help us put an end to natural disasters such as earthquakes and volcanic eruptions, but there are so many other kinds of disasters and problems that we can prevent – or at least reduce – in our personal lives. And prevention is almost always the least expensive and time-consuming alternative to our individual problems. Here are the five money problems we can all prevent:

Credit Cards. As of 2020, about 70% of adult Americans – from all generations – were carrying an average of $15,000 in credit card debt. If you owe $15,000 and pay only the minimum payment each month and don't charge anything else on the card, by the time you pay off the balance in probably 10 years or more, you will have paid almost as much in interest as you did in principle. So how do you prevent this kind of financial disaster? First of all, think before you spend. Ask yourself if you really need it or if you just want it. Second, don't use credit cards for anything other than an emergency. Instead of paying money to a credit card company every month, take that money and put it in a savings account or mutual fund. Even if you don't earn a lot of interest that way, at least you won't be throwing your money away.

Eating Out. Stop or at least reduce the amount you spend eating out. It's a huge waste, and with kids at the table, it's an even greater waste. Most restaurant meals cost more than five times the cost of the same foods purchased at your local grocery store. There is nothing in a restaurant or even at a drive-thru fast-food joint that you can't make at home for a small fraction of the cost of dining out. Prevent this kind of waste by learning to cook, and then teach your children how to cook too. It's extremely easy once you learn the basics, and there are classes as well as numerous cookbooks available to teach you how to do it. People ask me all the time how I make all my various pasta dishes, and I tell them, I boil the pasta and add whatever I like to it. There is almost nothing you can't put in pasta. Same with rice dishes. Mexican food is mainly the same ingredients used in tortillas and taco shells. Once you learn how to cook (and cook healthy), you will get better organized at preparing a meal quickly so that it isn't such a chore and is easier to clean up afterwards.

Gas. Our vehicles release billions of tons of greenhouse gases that contribute to global climate change and general air pollution. You may not be able to afford an electric or hybrid vehicle, but while you still have a gas guzzler, remember that gas prices fluctuate, often skyrocketing at times. Most of us have to drive somewhere, especially if we live in rural or semi-rural areas. But we can still prevent a good deal of these emissions and reduce our vehicle expenses as individuals. When you drive, do all your errands on the same day and plan the route you take to reduce drive time and gas usage. And walk, bicycle, or take the bus to school, to work, when you shop, and wherever you go. A bus is far more economical than a car, and it is a rare place that doesn't have public transportation.

Housing. We have major homeless populations in America, and the problem isn't going away. People with jobs – the working homeless – have now joined those populations. There are numerous reasons for people to become homeless – I was homeless and living in my car for two months – but for some people the problem is at least partly preventable. Don't live beyond your means. Never spend more than about one-third of your take-home wages on rent or mortgage payments. You will never manage to save any money if you don't. And, you need to save money in case you lose a job due to a layoff or an injury, etc. Your kids don't need their own separate bedrooms or their own bathroom. They can share. Save your money and take some classes to improve your earning potential at a better job.

Addictions. Do you know how much your smoking and drinking costs? What about your caffeine habit? Oddly, many people don't recognize the financial impact of these habits at all. They've been buying cigarettes and alcohol and drive-thru coffee for so long that they don't think about the financial impact. So let's look at it. A pack of 20 cigarettes costs about $10, or and a light smoker smokes an average of about five cigarettes per day – that's $2.50 per day, or almost $1,000 per year. Alcohol? Depends on whether you buy a can or a bottle or drink in a bar, but studies indicate the average light drinker consumes about 4 beers per week, or 208 cans per year – that's about $30 per week, or about $1,500 per year. Coffee? A run through Starbucks to get your morning workday caffeine fix is about $3.50, or $17.50 per week – that's about $900 per year. Quit smoking and drinking, and brew your own coffee at home and take it to work in a thermos or other container.

Everything you do in your life impacts on your wallet (and your health). Think about what you do and how much it costs before you break the bank and waste your hard-earned money. Take control of your spending so that you can live better and be free of debt. Prevent money problems before they occur. You can do it!

03/14/2021: Respect for Money

I think it's important to take a few minutes now and again to see if there are ways that we can improve our thinking and the way we live our lives. I have learned a lot of things this way, and many of those things have formed a very strong basis for my values and beliefs, as well as my work and my lifestyle.

In particular, I have learned a lot about money and things. I grew up in a family-owned business where we had money for a couple years, none for a year, a little more the next, then not as much, then two or three years with money. Yikes! We were never dirt poor or filthy rich. But I learned early on in life to buy only what I need and only what I love and use. I have learned to shop around and wait for sales before I buy. I only buy what is of value and that will last for a long time. I have learned to avoid buying from point-of-purchase displays. I have learned to buy in bulk and on sale those things that I use over and over again, such as toilet paper, soaps, and certain foods. I have learned to buy used whenever possible, because "new" does not always mean "good." So many new things being made today are expensive yet of the worst quality in materials and workmanship.

And, because I'm a garbageman's daughter, I have learned to never waste anything. I try whenever possible to avoid buying things that aren't re-usable or recyclable. For example, I normally buy cat litter in recyclable cardboard boxes, but for awhile I bought it in plastic buckets because I needed and still regularly use those buckets. And if I do end up buying something that I can't use or used for awhile and no longer use, I either sell it or donate it immediately. I refuse to become a hoarder. As for food, it is truly amazing how much money people waste on food by not thinking about what it is they plan to cook and how many people what they cook will serve. If you aren't going to eat leftovers, don't make so much to begin with.

I also learned to take good care of what I own. I maintain everything very well. That includes my computer, my electronic gadgets, my gardening tools, my art supplies, my clothes, and my furniture (exclusive of upholstered stuff which I buy dirt cheap, often used, and replace regularly). I have mechanical pencils that are more than 40 years old and paintbrushes that are even older than that. I've met people who throw away a perfectly good knife or scissors when sharpening is all that's needed. And it certainly doesn't take a genius to sharpen a knife. I have three different garden clippers that I have had since 1972 and they work perfectly. I just sharpen and oil them once a year, along with my shovels and other garden tools. Since I was 16 years old, I have used my grandmother's scissors for everything and they are now more than 115 years old. I have used them for just about everything and I have only sharpened them three times in 55 years.

My late client, Marc – who had a PhD in economics and owned several apartment buildings in southern California – once told me that when people don't take care of what they own it's a reflection of how little respect and value they place on whatever it is they did to earn the money they used to buy their things. And I have learned that he is absolutely correct. When you buy anything you should take care of it, because you went out and worked to make the money you used to buy it, and those hours you worked should not be undervalued and wasted.

In this same thread, I also learned that there are some things that you should not spend money on regularly, and eating out is at the top of that list. It is the single biggest waste of money and for many people it does nothing but contribute to their credit card debt. And speaking of credit cards, I learned to avoid using them for anything other than an emergency. Credit cards are the single biggest waste of money in the entire world. That interest just grows and grows as you spend and spend. I've known people who owed more than $100,000 in credit card debt, all from spending beyond their means and buying things they wanted but didn't need. I think credit should be used for emergencies only, or the cards should be paid in full monthly. Basically, if you can't afford to pay for it in full, you can probably live without it. Save a few dollars every month until you can afford to buy it with money, not plastic.