The Pros And Cons of Credit Cards

The Pros And Cons of Credit Cards

“Once you get into debt, it’s hell to get out. Don’t let credit card debt carry over. You can’t get ahead paying eighteen percent.”

Charlie Munger, Vice-Chairman, Berkshire Hathaway

 

For me, credit cards have always been a double-edged sword, a fight between good and evil, or in Biblical terms, a blessing and a curse. Growing up, my parents predominantly used cash, using their retail business’s checking account to pay bills. I was the first in my family to go to college and the first to have a credit card. My parents celebrated the former, and not so much the latter. They only accepted cash from their customers, refusing to believe in the benefits of the credit card. That’s where I probably get my reluctance to use credit cards instead of cash at times.

They may have been onto something though it may have been something else altogether. My mom, I still believe, may have been irked by the fact that women, on their own, could not get their own cards until the Equal Credit Opportunity Act of 1974  was passed. Before that, women needed to have a man (husband or father) cosign for a credit card. How was it fair that my Dad, not my Mom, the brains behind all our finances, could get a credit card? Just saying why I think my Mom, until the day she died in 2000, never had any interest in a credit card (pardon the pun!).

The Credit Card Landscape

Credit cards are a financial tool. But like buying a new buzz saw, you need to use it with care. Some people collected credit cards like baseball cards when I was growing up. That seems like a formula for disaster to me. Clearly we are not yet a cashless society with nearly 1 in 4 people unable to get approval for a credit card due to lack of credit history or discipline. Roughly 33 million people in the US are unbanked or underbanked, meaning they largely use financial products outside the banking system.

When COVID hit our shores in March 2020, new card applications dropped 40%  from the first week of that March to the last week of the month as compared to the previous month. Inquiries for all kinds of loans–auto and mortgages–dropped substantially as our priorities were shaken to their core.  The irony is that the use of credit cards increased out of necessity due to fear of touching cash on the risk of getting a coronavirus-related infection. That behavior is just another example in an already rich year of strange happenings.

Credit Card Statistics:

 

Advantages of Credit Cards

 

1. Convenience

Compared to cash, credit cards are a convenient financial product. Before COVID, retail businesses were increasingly not accepting cash from customers. Credit cards provide fast payments, transfers between accounts, and withdrawals.

There are far more shopping options with a card. It is easier to make, change, and cancel travel, hotel, and car rental arrangements.  When traveling overseas, credit cards allow you to realize currency conversions automatically.  Let’s face it, it is hard to carry a lot of cash–bills and change– around in your pockets jingling around. That said, I do like window shopping without my wallet so I don’t feel tempted to spend money unnecessarily.

2. Build Up Your Credit

For those who lack credit history, like young people, becoming an authorized user on your parents’ credit card is a rite of passage. This is a good way to build up a credit history so long as your parents’ credit scores are strong. Otherwise, it won’t help your credit situation at all.  Most states do not have minimum ages for your child to become an authorized user. I’d suggest you teach your kids about responsibility in using a card safely and responsibly first.

Getting a new card may be a second chance to improve your credit score. You have missed payments, hurting your credit score in the past. If you are ready to be responsible, you should consider getting a secured card, putting some cash on account. You don’t need a massive number of cards to strengthen your payment history and length of credit history. Understand common credit mistakes and how to avoid them.

Related Post: 6 Ways To Raise Your Credit Score

3. Easy To Track Spending

Reviewing your credit card bills regularly helps you track your spending. It is easy to do (except when you know you spent a lot of money) and an excellent way to improve your financial discipline. Although spending cash is the best way to feel pain immediately, regular examination of the amounts you are spending is a realistic way to correct yourself. The credit bills serve as a receipt or a record of the purchase in the event of making a return.

One particular month, I recall seeing a very high bill with a number of items that seemed uncharacteristic of me. It was a posh store with a great salesperson.  Looking around,  I realized that the dress  “I had to have” was still in the bag with the tags still on along with new shoes. Who did I buy that for? Not me apparently so I returned those things and stayed clear of that salesperson.

4. Automate Your Payments

Paying your bills, especially credit cards, are so much easier when you use the automation feature. Most cards have this feature that you can set on or before the due date so you are not late on your bill payments. Also, consider paying more than once a month if the lower amounts feel better to digest. As payment history accounts for 35% of your credit scores, automating payments is one way to help you not miss the due date.

5. So Many Perks

Having a credit card may entitle you to a host of perks. Typically, use of the card may allow you to earn a percentage of cashback, rewards, airline miles or points, discounts at eligible merchants, restaurants, theaters, hotels, travel insurance, welcome bonuses, early access to tough-to-get tickets, and free museum passes. Before signing up a certain perk, make sure it aligns with your needs. One time I ordered four tickets for Hamilton on Broadway for my family, only to realize they were preview tickets for the opening in LA, 3000 miles away. The issuer reimbursed us and waived the fees.

6. Protections For Consumers, Not Necessarily For Businesses

Credit cards offer several features for consumers. When you lose cash, it is gone forever. The good news is that cash is typically not attached to your personal information like the loss or theft of your credit cards. Some cards provide zero-liability fraud protection. In a fraud situation, just notify your issuer to cancel your card. Alternatively, the issuer can get you a new account number at no charge. Safety is important.

Typically, when you lose your credit card, your losses are capped at $50 so long as you let the issuer know promptly. There may be a higher fee and responsibility for any charges that aren’t yours if you delay reporting it. I once thought I lost my card so I called the card company quickly only to find that my card fell out of my wallet into a nook in my bag. Paying the fee was a fine for a lesson learned to at least look for your card first.

Cards often have spending limits. Occasionally, you may want to lift the limit if you know you may be spending more for an overseas trip, for example, where you plan to shop for jewelry. A cardholder can let their issuer know that they want to “opt-in” to allow for transactions that may put you over your credit limit. You can let them know the specific dates you’ll be traveling. Spending limits are a good feature, especially if you’re prone to overspending.

The Credit CARD Act of 2009 enhanced more protections for consumers that do no apply for businesses. With this law, issuers are required to notify consumers of significant interest rate hikes at least 45 days beforehand. Also, fees and charges, previously hidden, must be better disclosed clearly. There are some other practices that were improved with the CARD Act discussed here. Still, it is always important to read the tiny fine print, especially when it comes to credit cards.

Disadvantages of Credit Cards

 

 

1. Overspending Leads To Higher Debt

Spending beyond your means can be the root of all evil related to your finances. Credit cards enable people to shop impulsively.  Having a card rather than a finite amount of cash gives you the ability to borrow more than you should. This leads to carrying high-cost debt on your balances. This can be overwhelming.

The convenience of using credit cards as compared to cash may encourage higher spending according to studies. In the now-classic MIT study by Drazen Prelec and Duncan Simester, MBA students held an auction to tickets to sporting events. One event was a desirable basketball playoff game and the other was a regularly scheduled baseball game. Those participants encouraged to buy tickets using credit cards spent up to 100% more than those who paid in cash. They called this the credit card premium.

Other studies seem to validate the MIT findings that we tend to spend more with a credit card than cash. For me, spending cash gives me an immediate pain as opposed to a nearly month delay of having to pay my credit card balance.  to me mental accounting bias and overspending

2. Irresponsible Use of Your Credit Card

When you pay your card bill in full each and every month, you are not charged any interest. Your credit card provides a lot of benefits without the pain of paying high-interest costs. Unfortunately, many people just pay the minimum amount due at the end of the month, carrying a balance forward. That is all that is required by the issuers who prefer their cardholders to carry balances that feed these companies.

At an average balance of $3,000 with an average interest rate of 16%, it can take 16 years to pay off that balance at the monthly minimum rate which is roughly 3%-4% using a credit card interest calculator. That assumes that you haven’t used a credit card during those years. It is a vicious cycle. The magical powers of compounding that work so well when investing or saving for retirement works against you when you are paying interest charges on interest accumulated. If you cannot use your card responsibly, you should work hard to reduce your spending. Some people have too many credit cards, maxing out their limits, losing control of their spending.

Watch out for the particularly punitive penalty interest which may be imposed when you are late on your credit card payment. The penalty interest rate could be as high as 29.99%, above your regular interest rate, and may stay in place for a period of time.

3. Lower Your Credit Score

Just as you may be able to raise your credit score, misuse of your credit cards can destroy your score. Missing payments, applying for credit too many times, and using more than 30% limit of your available credit all can hurt your scores. Even closing a credit card account you don’t use will result in a decline in your score. Your credit score reflects on your creditworthiness to lenders, landlords, and other professionals and could impact you negatively.

4. Read The Fine Print

Just like any contract you sign, make sure to read the terms and conditions of the credit cards you are considering. Despite legislation to protect consumers, issuers are well known for hiding information about their perks, fees, charges, and other liabilities that you should know about. In recent years, consumers have been able to compare credit cards more easily. Among my favorite sites are WalletHub, NerdWallet, and CreditCards.com which have a ton of good information on credit card features.

Be aware that if you have a dispute with your card issuer, you are usually subject to mandatory arbitration. This has been relaxed in recent years but is still buried in the terms and conditions. It is one of my pet peeves and a project I assign my law students to look at the fine print. The average consumer can’t fight the legions of arbitration attorneys that support card issuers.

Exercise Financial Discipline By Using These Rules:

  1. Shop wisely for a credit card, finding the perks that most suit you.
  2. Read the terms and conditions carefully even after you made your selection.
  3. Pay your credit card bill in full so you don’t carry a  balance.
  4. Have an ample emergency fund so you don’t put large unforeseen costs on your card.
  5. Spend below your means always and make savings and investing a priority.
  6. Don’t close any credit card. Instead, cut your card in a million pieces or simply put it in a drawer.
  7. If you have multiple cards, decide how to use them for different categories and don’t max out their limits.
  8. Avoid cards with annual fees unless they have important features you will use.
  9. Don’t get addicted to credit cards. Limit the number of cards you have.
  10. When it comes to paying your card bills, automate and don’t procrastinate. The penalty rate is punitive for a reason.
  11. If your child is an authorized user of your credit card, teach them about how to use the card wisely and safely.
  12. Be aware of behavioral biases of spending more when using your credit card instead of cash.
  13. Review your credit card bills for errors, poor judgment on your part, or to correct impulsive spending.
  14.  Once COVID goes away, hopefully soon, use cash for some of your discretionary spending.

 

Final Thoughts

Credit cards serve an important purpose as a financial tool in an increasingly cashless society. Used wisely, the advantages of credit cards will outweigh its disadvantages. Exercise financial discipline in all aspects of money management. We have had our druthers about using credit cards, learned a hard lesson or two.

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Remote Working As The New Norm: Advantages and Disadvantages

Remote Working As The New Norm: Advantages and Disadvantages

“We like to give people the freedom to work where they want, safe in the knowledge that they have the drive and expertise to perform excellently, whether they are at their desk or in the kitchen. Yours truly has never worked out of an office, and never will.”

Sir Richard Branson, Virgin America

As a result of the coronavirus pandemic, we, as a society, have been forced into virtual reality. To avoid the virus’s spread, we have shifted to contactless services, mostly online learning, telemedicine, and remote working. Are we tiring of all of this virtuality?

As COVID caused work disruption, many organizations that had already embraced remote working quickly adapted their employees to a full-time virtual schedule. Remote working expanded dramatically as working from home became a necessity for many reasons. In their latest conference calls with investors, company management addressed how they could quickly hook up their employees to their networks, enabling new remote working arrangements.

With the virus still a menace,  employees are not rushing back to their offices. Reflective of the work at the home trend, public transit systems across the country have lost significant ridership.

For organizations with new remote working arrangements, there was more of a learning curve. Companies shifted their employees to work from home with virtual tools for the first time. While CEOs speak with pride at how well they handled the technological aspects, the human element matters much. Remote work is not for everyone as recent surveys imply.

As a professor, I have been working from home since March 2020 and will continue to do for the Fall semester. Students adjusted at varying paces, adapting to the technology but still wanting face-to-face contact, whether in the classroom or during office hours.

Remote Working Is A Growing Trend Likely To Last

Unlike the massive move to online learning for schools, colleges, and universities in March 2020, remote working was already growing. Millennials had sought flexible time as a desirable perk. Recent college grads and even Boomers have sought this desirable perk. Working from home is far more geared for those in specific careers requiring higher education, city dwellers, and in higher-income brackets. For example, people working in accounting, finance, and software engineering were more likely to work from home than meatpackers. The latter had to make tough decisions between facing the health crisis or stop production altogether.

Remote working doesn’t work for everyone, even for employees in suitable jobs where working from home is more common. According to the US Census, about 5.3% typically work from home. In the Owl Labs State of Remote Work 2019  survey, 38% never worked remotely pre-pandemic, while 62% have worked remotely at any frequency.

We first addressed how the coronavirus would be a tipping point for remote working here and have updated our thoughts.

Remote Work: Advantages And Disadvantages

 

Advantages

 

Flexibility

Alternative work arrangements are valued as long as employees have reliable internet connections. As reported in this survey, the ability to have a more flexible schedule is the most significant benefit, according to 32% of people who regularly work remotely. For working parents, the desire for work at home tends to be higher than for people without children. Working at home tends to be less stressful. Avoiding lengthy commutes reduces angst while saving time and money. As a result of the virus outbreak and social distancing, many workers could transition reasonably easily to working from home.

It is difficult for young people seeking desirable jobs in San Francisco and New York City to find affordable apartments or homes. Working from home at least part of the time could be their solution. Eliminating some commuting time would be a game-changer, especially if they are thinking about starting a family. Autonomy for employees working at home leads to improved job satisfaction.

Better Work/Life Balance

For many, remote working provides a better work/life balance. By avoiding a potentially long and irritating commute to work, you can start your day earlier. You can work at your own pace provided it coincides with the job’s priorities. It may be more comfortable to take care of doctor appointments, picking up kids from school, or taking care of chores at different times of the day, and working when you are most productive and at your best is a great option. 

In recent years, remote working jobs have provided work/life balance benefits as a top perk. Employers and employees are seeing positive remote work productivity, eliminating one of the issues employers feared increasing remote work job opportunities.  

Increased Productivity

Many employees report increased productivity working from home. Those traits transfer to wherever as long as you have self-discipline and are organized. Distractions at the office occur beyond the water cooler. Gossip, office politics, meetings, and calls often threw me off my game when I worked on Wall Street. I was far more productive late at night or over the weekend when I tuned everything out, but the work needed to get done.

To be productive at home may require some self-discipline. Prioritize your “must-do” work first. Then manage your time to maximize your achievements fully. I can thank my mom, who always pestered me by asking, “So what did you accomplish today?” at a very early age. One danger of working at home is that many people say they work longer hours. While it is easy to justify longer work time without the commuting time, give yourself that needed a break. Take a walk, exercise, or text a friend.

Savings For The Employees

People working from home realize additional savings. According to Global Workplace Analytics, working at home half the time results in savings of $2,500-$4,000 per year. The reduced costs stem from less travel, parking,  and food. These savings are net of expenditures for the home, such as additional energy and food costs. These may vary depending on how far your commute is and if there are bridge & toll payments. You may even save money on your office wardrobes by staying in casual clothes or PJs. Remember to put these savings into your emergency funds account and invest in accessible liquid securities. We discuss why you need an emergency fund and where to invest your account here.

We should save time, that precious resource. If you work remotely half the time, Analytics estimates you save the equivalent of 11 workdays based on lower commuting time. Who wouldn’t want to get those days back? There is a close relationship between time, money, and productivity.

Company Cost Savings

A typical employer could save an average of $11,000 annually per half-time telecommuting per employee based on estimates from Global Workplace Analytics. Increased productivity, lower real estate taxes, reduced absenteeism and turnover, and better disaster preparedness contribute to those forecasts. During COVID, there may be far more savings than the $11,000 estimate based on drastically reduced travel and entertainment expenditures.

Employers are encouraged to use this Free Telework Savings Calculator, which has received accolades from Congress. The comprehensive calculator allows employers to quantify benefits based on US census data from states, cities, or even counties and congressional districts with 59 variables.

For example, to calculate real estate savings, employers can change assumptions based on average office size, $/square foot, person/desk ratio, and other related variables and locations. Employers will be able to save office rent in high-cost cities like New York where most midtown commercial buildings have been empty most of 2020.

Increased Independence

According to the SHRM 2019 Employee Benefits survey, 69% of employers offer remote work on an ad hoc basis to at least some employees. However, full-time employees are more than four times likely to get those options. Post- COVID, many employers will have had more experience and confidence to offer remote working options. Giving employees greater autonomy from working at home leads to better job satisfaction and reduced turnover, a significant benefit for employers.

 Flexible Work Options Attract And Retain Talented Employees

There was increased demand for a flexible work option that including working-at-home, especially from young people before the coronavirus. It is likely to be an important company benefit for many candidates. Many companies have allowed their employees to work from home during the virus that may not have encouraged the arrangement before. As a desirable perk for young employees, flexible work offerings help to attract and retain talented employees.

As a result, management may be having positive experiences with remote working options. They have been able to test the resilience and productivity of their employees. With positive results, they may be more willing to encourage telecommuting. It is foreseeable that those employees who worked from home will not readily go back to working in an office environment only. Employers need to anticipate more demand for working from home options.

Employers Have More Confidence

Many companies may have resisted allowing their employees to work at home to fear lost productivity or lack of essential technology. Findings from a May 2020 study reported that remote work had only a small negative impact on productivity (of 1%). However, those employees working from home with children reported a slightly larger decrease (2%) in productivity.  In some cases, it seems that businesses may have realized some productivity benefits.

Those companies that had already deployed powerful technology for their workers may have been more prepared for the challenges. Technology for employees requires support with web-based teleconferencing and video conference platforms. Other companies may have been more flatfooted. They could not move to a “Plan B.” These companies will need to develop better disaster planning strategies develop. There is, however, a more significant infrastructure issue. There is a lack of broadband Internet availability in rural and poor areas, which may hamper some employees from working from home.

Remote Work As A Desirable Skill

As a remote worker, you are likely to develop new and different skills. Learning how to work independently and collaboratively sounds a bit oxymoronic, but it is not. While you may be working alone when home, there are times when you will be working as part of a team. There will be greater emphasis on communication skills, whether in written, video, or phone calls. Increasingly, there are many software and apps such as Slack, which you can use to share documents and to communicate. Working from home requires more focus to separate yourself from distractions at home and to stay productive. These are attractive traits to have in your work background.

A Societal Benefit

For companies in congested traffic areas such as Los Angeles, offering alternative working options for employees would be seen as an eco-friendly move. All organizations need to play their part in battling climate change by reducing their carbon footprint. Besides day-to-day commuting, there may be reduced business travel to meetings and conferences, affecting our energy consumption. This energy change has resulted in a better environment from reduced commercial and educational sources since COVID began.

Disadvantages

However, not all employees want to work from home. It became necessary for workers to remotely due to COVID. Firms were not fully prepared for this change. Other organizations have been allowing remote working for years. In a Robert Hall survey, 47% of employees surveyed said that the company provides that option. Of that 47%, 76% do take advantage of the perk either working at home or elsewhere. However, 24% of employees did not opt to work outside of the office.

Reasons:

  • They did not have adequate technology available at home (39%).
  • Workers are not as productive working from home (38%).
  • Fear of missing out on opportunities or assignments if they were not in the office (29%).
  • Employees felt lonely and missed interaction in the office (22%).

We will address each of these and other disadvantages.

Remote Work Doesn’t Work For New Hires Without Some Training

Starting your first job out of college, starting a career, or an internship is often a challenge. Thrown into a new environment with new people, management, and new systems, it takes time to learn who are your colleagues, boss, and priorities. You feel like a fish out of water. However, working remotely for a new employee for the first time may be too overwhelming even for the most confident person.

As an example, Google has said they intend to keep employees working from home until mid-2021. At a minimum, these organizations need to make exceptions for new hires to acclimate them to the home office for some time. Management needs to be sensitive to increased communication, clarity about the priorities, and sharing their expectations to new employees.

Lack Of Adequate Technology At Home

The lack of access to broadband Internet in rural and poor communities is not a new problem. About 5.6% of our population in rural markets lack access, according to the FCC. Some say it is higher than that. The lack of high-speed connections, that is, the digital divide, became far more visible during the pandemic. Some work-at-home employees may rely on satellite connections or travel to the next town to a library to get links to participate in video conference calls.  Some families may not afford subscription services, internet capacity, or equipment to work from home. They may have been using mobile devices that are not suitable for work.

Feeling Isolated

Employees, not just new hires, have expressed feelings of isolation when working at home. There are fewer chances for employees to be engaged or socialize with others when working from home. The camaraderie at the office is often a big motivator but more awkward when everyone is at different locations. Having zoom calls can be stilted or challenging when some people have dogs or kids in the background. I am guilty of having that background noise when speaking to my boss.

I have reached out to several business owners who began remote working as a result of the pandemic. We spoke about how they deal with some of the challenges raised by employees staying connected to their organizations. They shared that they have increased one-to-one communications to keep in touch. At least at first, some managers reset productivity expectations for the businesses that rely on face-to-face interactions. Some explored virtual get-togethers with staff and clients using coffee klatches, fitness instructors, virtual dance and pizza parties, and cocktails on Friday afternoons. Stitch and bitch sessions are also growing in popularity as employees may be growing tired of the virtual office.

Difficult To Unplug From Work

While a work-life balance is usually an advantage of working from home, some find it difficult to separate your career and personal life. You may be working longer hours because you are not commuting and have free time. What sometimes helps is to write out my to-do list for the next morning as a final task in the evening.

There are plenty of distractions around my house that remind me that I am working from home. I block it out during the day, but I usually get a tap from the dog or one of my kids telling me it is time to stop. It is a good idea to have boundaries between my physical desk and home life, but my husband commandeered the house’s best space.

Final Thoughts

The rapid move to remote working for many organizations happened quickly due to the pandemic. Working from home was already a growing trend and, for many, a desirable perk. There are many advantages of working remotely, but it is not for everyone. We addressed some of the key disadvantages or situations where remote working may be problematic. To some degree, management may improve the remote work experience simply by being more sensitive to employee needs. The lack of broadband technology in rural areas requires government intervention to improve connectivity and our aging electronic grid which we address here.

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Benefits Of A Generator When Outages Impact Your Home

Benefits Of A Generator When Outages Impact Your Home

“We Have Power!”

 Craig, my husband

How precious those words were when we regained utility services.  Our family, among many, endured a multi-day outage caused by Hurricane Isaias. It is truly one of the more disruptive events that can happen. Typically, you don’t get a lot of warnings when outages occur. The best you can do is to be patient and go with the flow (pardon the pun!). Then hope you are covered by an effective utility company that is on the ball.

With two houses in different locations, I thought we would finally reap the benefit of having two locations despite the fact we had dual outages. We quickly relocated our family to the rented house which had a standby generator. Little did we know that the owners’ generator wasn’t working. It only sputtered out error messages. At least the rented house had water but nothing else. I soon realized that we would have to empty our two stuffed refrigerators filled with fresh and frozen food, including meals I always prepare ahead of time. What an unfortunate waste! Suddenly buying things on sales didn’t feel like a bargain anymore.

Power Outages Are Pains In The A** But Keep Your Perspective

Yes, we had candles, flashlights, and other supplies. It was our first outage not counting brownouts. I was proud of our teens as they handled themselves quite well in the initial days. By the fourth day, they were getting anxious about being out of touch with friends, and having schoolwork to do. Having a puppy made things a bit harder for all of us, especially feeding time when we didn’t have yogurt for him.

However, it was important to keep our perspective. Falling trees hurt no one. People go through a lot more worse conditions as a result of emergencies. We were safe with temporary inconveniences like no toilets or showers, no wifi, TV, or lights. However, I wanted to understand what we can do about this in the future as we did have some costs to bear. Both Craig and I work from home with deadlines to meet but our computers were silenced by the power outage.

We will file for some recovery with our respective utility companies. Our budget took a hit as we had to spend more money dining out for all our meals; bought water and jugs to flush our waste, and gas for the generator we borrowed. The banks were closed during the first few days of outage though we had cash on hand. An emergency fund is particularly important to have for events like this. We suffered no damages to windows or house from falling trees.

Aging Electric Infrastructure Means More Outages Are Likely

When a power outage occurs, whole communities as retailers as well as businesses overall get impacted. No one cannot operate without electricity. Experiencing a power outage has become far more common in the US in the past decade as a result of our aging infrastructure. The US electricity grid was built in the 1890s and updated piecemeal as new technologies became available. Electricity is still our major power source.

According to the Department of Energy, 70% of our transmission infrastructure is over 25 years old. Gretchen Bakke, who wrote The Grid, said in a 2016 NPR Interview, said that our electricity grid has become increasingly unstable and underfunded.  Significant power outages averaged fewer than 5 per year from the 1950s to the 1980s. Since 2010, there have been more than 100 major outages annually. Bakke pointed out that renewable power sources have grown dramatically but our aging infrastructure isn’t capable of integrating them into energy sources.

Our electric grid cannot be fixed quickly and will require significant capital expenditures. Yet, not doing so, will guarantee that outages will become more commonplace. Modernization of the grid is key to the future of our economy. If we don’t update our grid, we will lose efficiencies, cost savings, ability to fully integrate wind and solar technologies, and be unable to provide better broadband internet to rural and poor areas. On the latter point, the pandemic has highlighted the digital divide that has existed for years.

Severe Weather Causes Outages

While hackers can impact our power systems, severe weather conditions such as hurricanes cause a significant percentage of power outages. As if the year 2020 wasn’t challenging enough with the coronavirus pandemic and a severe economic downturn, we now learn that the current hurricane season is expected to be “historic” as the most active in the 22-year history of National Oceanic and Atmospheric Administration (NOAA). NOAA just updated its forecast to “an extremely active hurricane season” through November 30th for the Atlantic Basin. They now expect as many as 25 named storms, a portion of which will become major hurricanes. I don’t think we need another historic event this year!

Should We Get A Generator?

The sad state of our infrastructure is a big problem that needs fixing on a broad scale. Other than using our voice and vote to get our grid in better shape, what can our family do to better prepare for more outages?

Towards the end of the ordeal, our friends, who had their power restored faster than ours, lent us their portable generator. It provided some relief. The wifi allowed us to communicate again and we had one of our refrigerators turned back on. Of course, our son, Tyler made sure that he could use one of the large screen TVs for his video games. Having some power back got us thinking about getting our own generator for our rural home.

Was this power interruption a once in a lifetime experience or could it happen more often? If the latter, does getting a generator make sense for us? We had to throw out a lot of food in two refrigerators and freezers that we had recently gotten as well as for supplies and dining out the whole week for a family of four. Suddenly a $750 portable generator starts to make sense. It fits into our budget and may give us peace of mind.

Related Post: Steps To Buying A Home Through Closing 

Benefits Of A Getting A Generator

 

1. Staying Comfortable And Safe During Emergencies

Having a generator would restore some of our daily routine activities quickly and potentially automatically. You can remain in your home rather than having to pay for a hotel. Depending on the size and type of generator, some of your basic needs can be provided, notably keeping the heater or AC working, power for the bathrooms (this is the hardest to lose), TV and cable connections, security systems, refrigerator, a few lights, and being able to use your computer. A generator is particularly important for families with health problems that may require the use of medical equipment. Simple things like being able to open your garage door and having a cup of coffee or tiny benefits I am grateful for. Having a backup generator provides some peace of mind. When you are without power, it is very stressful for you and your family, including your pets.

2. Maintain High Indoor Air Quality

Without a generator, indoor air quality deteriorates as open doors and windows will let in pollen, dust, dirt, and such. A generator is particularly helpful to keep your HVAC (heating, ventilation, and air conditioning) system running. HVAC systems bring in fresh air from the outside to provide better indoor air quality. This is an essential comfort for those with asthma or severe allergies. Within 48 hours, your food spoils and smells up your home. Also, high humidity can cause mold in your home.

3. Preventing Damage To Your Home

A generator allows your sump pump to keep working. This helps to prevent possible flooding in your home when there are heavy downpours or snowstorms. It can prevent pipes from bursting by maintaining power to your boiler in order to heat the house.  When power is restored after a few days, your refrigerator needs to be cleaned of its spoiled food. It is a lot of work and you may feel like you need to buy a new refrigerator. It keeps the water flowing for homes with private wells. In rural areas, generators are often needed to maintain electrical farm appliances and gardening.

4. Add Value To Your Home

Depending on the type of generator you get, it can add value to your home and help you rent it out. Typically, you will receive the greatest benefit from a system that provides coverage for your whole home and is a standby generator rather than a portable generator. Some insurance companies may give discounts on the homeowners premium if you have an automatic standby system.

Portable Generators versus Standby Generators

Less than 3% of American homes have standby generators while 12% have portable generators. Generac has 70% of the residential generator market although there are several other providers of these units.

Portable Generators

The cost for portable generators is significantly less than the standby generators, likely accounting for the higher percentage in US homes. The national average cost is $750 (ranging $200-$2,000)  for the gas-powered with about 5500 wattage.  These units vary by wattage with gas being the most common fuel type over natural gas, liquid propane, and diesel. The portable unit requires manual hookups using a number of extension cords that may add cost. An electrician can provide a transfer or switch to connect your appliances to the generator for $500-$800. There is no other installation as your unit should operate 20 feet outside of your home.

It is a manual system, easy to operate as our son, Tyler actually put it together for us.

Some portables have automatic shutoff features if it detects too much carbon monoxide.

How Many Watts Do You Need?

Power output is measured by wattage. The amount of wattage you should get is determined by how much coverage of your home and respective appliances you need. Consumer Reports says that 5K watts will cover the basics of a typical home though it really should be based on your family’s needs. There are units that go to 10,000 watts or more. The biggest portable I saw was 17,500 watts. To give you an idea of respective wattage, here are the required wattage:

  • Refrigerator – 600 watts
  • Sump Pump – 750-1500 watts
  • Portable Heater – 1500 watts
  • Window air conditioner – 1000 watts
  • Lights vary from 60 – 600 watts
  • Computers 60-300 watts

A portable generator can do the trick for some, but likely not for all of your needs.

The units hold 3-6 gallons of gas and have to be refilled often. (Motley fool) It is estimated that it takes 34 gallons of gas for average portable generator size for two days use. The price of a gallon of gas is low at about $2 now. When the unit runs out of gas, it stops working. This could be a problem as you don’t want your refrigerator to stop working.

The Drawbacks of A Portable Generator

While we find the portable generator is probably the way to go for our family, there are a few negatives to be aware of. As mentioned, portable generators will not restore every inconvenience so you need to figure what is most important to you. Your portable unit may use a lot of extension cords all over the house unless you have a transfer or switch. This may be unsightly for some people and pose a danger if you aren’t careful walking around.

You need to monitor the system periodically so it doesn’t run out of gas and stop running your appliances. The portable unit is not a good choice if you travel a lot. You don’t want to leave it running outside your home unattended. As it is noisy, your neighbors probably won’t appreciate you leaving it either.

Standby Generators

These units are far more comprehensive in their coverage of your entire home during an outage. They are automatic and will turn on upon the outage and off when power is restored. That means there should be no power interruption. The automatic feature eliminates the need for fuel storage as it is hooked up to an existing gas line. It has the potential to increase your home’s value and possibly getting discounts on homeowner insurance. On a personal note, the fact that the standby generator did not work as hoped in our rented home makes me a little biased against this kind of unit.

The Drawbacks For Standby Generators

For these reasons, standby generators are more expensive, ranging from $7,000 to $9,000 for an installed 10,000-watt generator. According to Remodeling magazine, comparing cost versus value, a $12,860 standby generator increases the value of your home by $6,940. That is a 54% recovery of your generator’s cost. The unit may take up significant outdoor space, require regular maintenance, and an inspection after installation. Like the portable unit, it is noisy when operating as well. You will have to run it on a periodic basis.

Final Thoughts

Our first major power outage that lasted a week was a drag on our family as it has been for many others. Unfortunately, we will likely see more power outages in the future. As a result of our experience, we are considering a portable generator as insurance. Losing food, having to dine out for every meal, and inconveniences were annoying in this difficult year. The larger issue is the aging infrastructure plaguing our country. It is partially the cause for outages as well as inefficiencies and the lack of broadband internet for many Americans. That has been part of the lesson learned I wanted to share in this article.

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Ten Commandments of Saving Money

Ten Commandments of Saving Money

“Do not save what is left after spending, but spend what is left after saving.”

Warren Buffett

I do not mean to insinuate Warren Buffett is “an ancient” but he is timeless in his wisdom. His words on saving and investments are inspiring. Saving money is the cornerstone of a sound financial plan. It takes hard work to be disciplined about saving money but rewarding us with financial flexibility. By making saving a priority, you are more likely to achieve financial success.

Key Reasons To Save Money

  • Help to achieve our financial goals.
  • Pay our bills on time and in full so we don’t need to raise our debt amounts.
  • Provide an emergency cushion for unpredictable costs.
  • Set aside funds for our children’s college tuition and for our retirement.
  • Make investments as the best way to build wealth and be financially secure.

Here, we revisit ancient views of saving money from timeworn texts and stories. Surveying these words adds a different perspective on finances. There is a common thread across varying beliefs on how we can save, avoid overspending, and invest for a better financial future. Please see the Ten Commandments of Personal Finance for other areas of interest.

Ten Commandments of Saving Money:

 

1. Spend Within Your Means

Saving money is an important financial habit to adopt. According to a CareerBuilder report, 78% of American workers are living paycheck-to-paycheck.  Even those with higher incomes of at least $100,000 (nearly 10%)  are having trouble making ends meet.

I grew up in a modest household that saved conscientiously. My mom reminded us often that our needs exceeded our wants and we had to be careful about spending. As a young girl, I didn’t always understand why we were having financial problems. Later on, I learned that my parents were setting up a small retail business that took a long time to get off the ground. Savings became part of our mindset from then on.

Control thy expenditures.”

To set aside money for saving and investing, you may need to cut some costs. To control your expenses, assess what your necessary living needs are. These are predictable monthly fixed costs such as mortgage payments or rent, property taxes, utilities, car loans, typical grocery bills, credit card payments, and any costs you pay monthly. Remember these costs are for our needs, rather than for our wants and desires.

Be reasonable about satisfying your every want. For example, that 10% raise on your $80,000 salary may not significantly help you to buy that luxury car (or chariot in ancient times) you have been eyeing. A rise in earnings may not fully accommodate every gratification we seek.

 

2. Build A Healthy Emergency Fund

As a result of the coronavirus pandemic, we have seen a record number of people become jobless as the economy has dramatically slowed. Although there have been federal stimulus packages that have added to state unemployment benefits, there is no guarantee this aid will be ongoing.

We are facing a huge economic downturn which has seen new job losses of more than a million people for 19 consecutive weeks. All of this has caused substantial financial stresses.  For those reasons, having an emergency fund is a necessity to pay for basic living expenses for at least 6 months if not a year. Having readily accessible funds in liquid funds such as money market securities helps you avoid having to borrow money.

Joseph’s Emergency Funds

Emergency funds as a prudent strategy appear in Genesis 41:34-36. In this passage, Joseph interprets Pharaoh’s dream about seven fat cows grazing by a river swallowed up by seven skinny cows. Joseph views the seven fat cows as seven prosperous years for Egypt, followed by seven years of famine. As a result of planning for this disaster, Joseph advises Pharaoh to store grain during the good years to be used in the following harder years. Save when you have more for those times you have less due to job loss, illness, or some crisis.

Adopting a habit of saving more provides you with more flexibility to allocate into investment and retirement savings. Begin by setting aside small amounts of savings of $1,000 but don’t stop there. Tough times prove that amount is inadequate. Don’t think of these savings as wasteful assets. Rather it is a means to avoid higher debt levels. As Proverbs 13:11 tells us, “Dishonest money dwindles away, but whoever gathers money little by little makes it grow.”

Having Liquidity is Key

Liquidity refers to your ability to easily convert assets into cash with little to no loss of principal. When your resources are liquid, you have the financial ability to pay for unexpected costs such as a loss of job, death in the family, or your roof is leaking.

Monetary assets are among the most liquid of assets. These assets include cash, cash-equivalent securities or money markets, treasury bills, savings bonds, savings, and checking accounts. True, you won’t earn much income as interest rates are near zero but you avoid having to use your credit cards with borrowing rates in the mid-teens.  Liquid assets can be used to support your fixed monthly expenses for 6 months or more. Here are two benchmarks to use:

Liquidity Ratio= Monetary Assets/ Monthly Expenses

Your monetary assets should support your fixed monthly expenses such as groceries, rent or mortgage, utilities and car loan for 6 months. A 6 ratio means having six months of monetary assets to pay for your basic needs of food, rent, utilities, and car loan, if necessary.

 Emergency Fund Ratio

The liquidity ratio is linked very closely to emergency funds. This is essentially a cash fund for emergencies in unforeseen events such as job loss, death in the family, unexpected surgery or immediate house repair. It works by using a targeted number of months that you believe is ample enough to support you through emergencies. If you are looking for 6 months or higher (and this is highly recommended) to set aside in one fund that can be invested in a high yield savings account or in money markets, then:

Emergency Funds Ratio= 6*Monthly Expenses

This ratio will give you a targeted amount of monetary assets needed to be comfortable for the possible emergency. If your household generates less predictable income, you need to set aside more than 6 months for a greater cushion. For more financial ratios that you can use as benchmarks see our post here.

3. Pay Yourself First

Start thy purse by fattening

George S. Clason, who wrote The Richest Man in Babylon, is believed to have coined the term “pay yourself first.”  That means you should put away at least 10% of every paycheck into savings. Start to save small amounts working your way up to 20% of income to allocate into retirement savings investment accounts. The initial savings can be allocated to an emergency fund amounting to at least 6 months coverage for essential living costs. Unforeseen events are unpredictable and undesirable but need to be planned for.

Once this fund is established, use some of your savings stash to invest for retirement and taxable investment accounts. Putting away some money may be difficult at first depending on your spending habits.

Savings should be one of the most important parts of your household’s financial goals. Adopt a “Pay Yourself First” attitude. Your monthly budget should call for savings to be at least 10% of gross income.

Savings Ratio = Savings/Gross Income

Savings refer to money in the bank, liquid funds, deposits, money markets, and other liquid funds, such as your emergency fund. Gross income is your total source of income on your budget, and includes what you earn, side businesses, bonuses, dividends, and interest income.

Your savings rate should be at least 10% of gross income. This is difficult to do when you first start to work. As your salary or what you make rises, it should get easier to put money away for savings. A healthy savings ratio of 20% would be a bonus (pardon the pun).

4. Track Your Spending By Budgeting

Spending more than your means is a bad recipe that leads to borrowing more. It is far more profitable to save money and allocate to investments that yield 5% returns or more than having to borrow at mid-teen rates with credit cards to pay for your overspending habits. “Whoever works his land will have plenty of bread, but he who follows worthless pursuits will have plenty of poverty.” (Proverbs 28:19).

Track your spending carefully by budgeting according to your priorities. Bava Metzia 42a instructs us, “A person should always divide his money into three: one-third in the ground (for the future), one third (invested) in business, and one-third in possession.” That may be an ancient way of splitting your funds. There are several ways to budget such as tracking your expenses, creating a monthly budget, or using the 50/30/20 rule. The latter budget is Elizabeth Warren’s rule of thumb using 50% of aftertax or net income for your needs, 30% of net income for your wants, leaving 20% for saving money, and paying debt.

Budget In Any Reasonable Manner

Budget in any reasonable way that allows you to control your spending. It is easier now than ever to track your spending using a variety of (free or fee) apps such as Mint, Personal Capital, PocketGuard, and YNAB for zero-based budgeting.  Alternatively, scrutinize your credit card bills and build your own excel spreadsheet.

I have noticed that our spending has changed dramatically during the pandemic. Our bills for grocery and household goods are higher than usual. On the other hand, we have savings from cutting out retail shopping, dining except for occasional outdoor places, hair salon appointments, gas, tolls, as we are staying closer to home. While I appreciate the extra cash, I am anxious like everyone to go back to some sort of normal existence.

5. Avoid Lifestyle Inflation

As our income grows, we often increase our so-called “essential costs” leading to lifestyle inflation. While we are allowed the occasional latte and extravagant dinners, we need to keep our spending in check. You shouldn’t deprive yourself of everything. However, fulfilling every desire is no longer a special treat.

“Keeping up with the Jones”  and conspicuous consumption often refers to material goods we may accumulate so as to fit within a certain social class we admire.  We compare ourselves to our neighbors or colleagues at work.  As a result, people fall into the trap of spending for a better car or house simply to enhance their prestige and social standing. This may be costly and divert resources that can be plowed into investing your money for greater long term wealth.

It is pretty common for people to spend their raise and bonus as soon as they receive it. I have often been tempted to buy something special upon getting a raise and bonus after a year of working hard. You soon realize your pay hike is pretax and shrinks on an after-tax basis. If you do need some things, make a list of what you believe is important if you had some extra cash.

Overspending And Materialism

Overspending leads to materialism and lifestyle inflation that is hard to maintain. Mishlei Proverbs 13:7 tells us, “There is one who feigns riches but has nothing; one who feigns poverty but has great wealth.”  According to Psalms 128:2 “You shall eat the fruit of your effort–you shall be happy and it shall be well with you.” This reminds me of another favorite book, “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley and William D. Danko.

Stanley and Danko profiled and compared millionaires in two categories: those who were under accumulators of wealth (UAW) and the prodigious accumulator of wealth (PAW). The UAWs were individuals who had a low net wealth compared to their high income because of spending to maintain their status. On the other hand, PAWs managed their wealth better, often living in blue-collar neighborhoods and buying used cars. It is an eye-opening account of the good and bad money habits of the wealthy.

 6. Bargain hunting or Shopping Addiction?

Shopping is often a fun activity to do do with friends or on our own. Marketing experts count on our emotions when we shop. Be aware of the biases we wear when shopping. Retail expert Mark Elwood has written about the psychological benefits of seeing bargains. He points out that stores like Best Buy use Goldilocks pricing or three-tiered pricing which ranges from low-to-high prices. The store is hoping you will buy the middle option with higher pricing than the low-end but not necessarily feature-worthy enough to pay more.

We should not pay list price for anything but make sure it is a real bargain. There has been a lot of worthwhile academic research about bargain hunting being a form of shopping addiction. For many of us, there is the thrill of getting a deal, irrespective as to whether we wanted that particular item or not.

Impulse Shopping Vs. Compulsive Shopping

Overspending when shopping can cause financial difficulties if you are subject to impulse or compulsive shopping. There is a difference between the two but are often used interchangeably. Impulse buying happens more frequently when a consumer has a sudden urge to buy on the spot without much deliberation. We all do this from time to time. Compulsive buying, on the other hand, happens where one experiences an uncontrollable urge to buy. That urge may be triggered by negative feelings which are relieved by that purchase. This may be more like a shopping addiction that potentially needs therapy before financial hardship occurs.

7. Compounding Growth

Start saving for retirement in your 20s through your employer’s sponsored 401K plans. Deposits in small amounts in retirement accounts made regularly benefit from tax advantages and compound growth over a long horizon. Automate this savings out of your paychecks. As such, your contributions are tax-deferred. Employers often match a portion of your contributions. This is like extra money you can earn from your company. Separately, establish an IRA (Roth IRA) for further retirement savings. Target your contributions to amounts capped by the IRS for maximum growth for retirement. Avoid withdrawing from these accounts as you may then trigger penalties and taxes you will need to pay.

As a goal, try to contribute to your 401K plan to the maximum level which is $19,500 in 2020.  Some years it may be hard to do, especially when you experiencing a job loss. Resist withdrawing money from your retirement account as there is usually a 10% penalty tax to do so before you turn 59.5 years. As a result of the CARES Act, it is easier to withdraw funds up to $100,000 during 2020 from certain tax-advantaged 401Ks and traditional IRA  accounts without penalty if you are eligible. That said, withdrawing this money will put in a dent into your retirement fund that will be painful later on.

One of my favorite quotes in The Richest Man is this: “It behooves a man to make preparation for a suitable income in the days to come, when he is no longer young, and to make preparations for his family should he no longer be with them to comfort and support them.”

Compounding Works Best When Investing Early

The power of compounding interest, linked to the time value of money, will benefit you the most if you save and invest early. Let your earnings accumulate and grow rather than withdraw money from your accounts. It makes a big difference if you start saving for your retirement 10 years later than your friends or if you invest for 10 years and then stop contributing to your 401K retirement account. It is difficult if not impossible to catch up by doubling the amount if you start investing later on.

As soon as your child is born, start saving for college through a 529 plan. These plans vary but are available in virtually every state. Like retirement accounts, they have deferred tax benefits and may have contribution limits. Check with your respective state program for details.

 8. Make Savings A Priority

Saving money is hard work and not necessarily natural for many of us. To make it a good habit, take steps to automate your savings. Most banks will allow you to automatically transfer a set amount of money from one account to another account. Your employer will be able to automatically deduct a percentage or a set amount of your paycheck to deposit into accounts such as retirement or investment accounts. Essentially, you are adopting a “pay yourself first” attitude so that you can allocate money into different buckets, especially for unforeseen expenses.

Motivate yourself to proactively save by setting short term and long term goals. In recent years, there have many headlines about insufficient savings by Americans for years. As the outbreak of the virus caused lockdowns, most of the country stayed home. The personal savings rate rose dramatically to an unusual 32.2% in April 2020 as consumer spending dropped significantly. Over time, it will likely come down to the more normal 7%-8% range. Spending versus saving is a common trade-off with lots of tension. Reduce spending you can’t afford. For other money trade-offs we have written about, visit this post.

Saving As A Good Habit…How Long Does It Take?

I had always heard that it took 21 days to break a bad habit. As a member of Weight Watchers, which is ALL about breaking bad eating habits (and it definitely works for as I am down 30 pounds and declining!) they always refer to the 21 days. However, I did not know of the 21-day origin.

The 21-day time frame dates back to nearly 70 years. Dr. Maxwell Maltz, a 1950s plastic surgeon found that it would take his patients about 21 days to get used to seeing their new face or post-amputation, they would still sense a phantom limb. Dr. Maltz wrote about his own adjustment period to changes and new behaviors to form a new habit….”.it requires a minimum of about 21 days for an old mental image to dissolve and a new one to jell.”

There is more research that indicates that it takes a longer time to form a new habit than 21 days. A 2009 study published in the European Journal of Social Psychology by Phillipa Lally, a health psychology researcher at University College London, indicated it took 66 days on average (in a range of 18 days to 254 days) to form a new habit.

Whether 21 days or 66 days, it takes significant time, effort, and determination to create a new habit.

What About Savings Challenges?

I have been skeptical about savings challenges. Like diets, they work for many and can be fun, especially if you do so with others. The question is whether the challenge can result in having long term effects. I think any challenge that can motivate someone towards a good habit with lasting results has my endorsement. There are so many good savings challenges to consider. I tend to favor the 52-week challenge which may help you build some money along with good habits. On the other hand, the no-spend month reminds me of a fasting diet and seems too difficult to attempt for most people with families and/or busy lives.

I often have turned to using cash only and leaving my credit cards behind. Paying for meals at restaurants or window shopping without cards has rewarded me by limiting my consumption to the cash I am carrying. I am not a big shopper nor particularly enjoy going into stores unless I am going purposefully for a specific outfit or electronics. My daughter, Alex is often upset with me, encouraging me to buy something for myself. She wonders why I don’t love shopping as much as she does. Now that she is working two jobs that she loves this summer, she has become quite a hoarder herself and has asked me about my stock picks. (Okay, I am proud of her!).

9. Don’t Obsess About Money

Maintain balance in your life that isn’t solely based on wealth accumulation. According to Proverbs 21:20, “Precious treasure and oil are in a wise man’s dwellings, but a foolish man devours it.”  While no one seeks to become poor, there are dangers of solely wanting to be rich. “Keep your lives free from the love of money and be content with what you have.” Hebrews 13:5

Rev. Martin Luther King Jr. worried about the obsession of money in his famous speech, called False God of Money. He said, “We attribute to the almighty dollar an omnipotence equal to that of the eternal God of the universe. We are always on the verge of rewriting the Scriptures to read, ‘Seek ye first money and its power and all these things will be added unto you,’ or ‘Money is my light and salvation, what shall I fear.”

King himself lived frugally, leaving little money for his family. However, he saw other goals like working hard, investing in education, and having faith as far more important.

Price Versus Quality

Being financially secure is important. The alternative is stressful. However, don’t be frugal for frugality’s sake. Consider price versus quality in your buying considerations. The cheapest thing may not be of the best value. Certainly, there are some items that I don’t care about except for paying the best or cheapest price such as convenience products for the household. I like buying private label products such as Kirkland sold in Costco which I know have been discounted from the branded items.

However, quality matters more when you are buying furniture, mattresses, a car, or home. We have been burned by looking to get a bargain and not balancing quality. Buying solely on a price basis is foolish for these types of products or services that I intend to use for a while. That doesn’t mean I am averse to getting a bargain by negotiating.

10. Be Charitable

According to Jewish law, it is forbidden to impoverish one’s wealth by the distribution of all of one’s wealth to charity. However, one can leave one-third of his estate to charity in his or her will. A minimum of one-tenth of one’s income belongs to God per measure handed down from the Patriarchs as Jacob himself said to God, “Of all that You give, I will set aside a tenth to You” (Genesis 28:22). Giving 10% of your net income annually is a virtual goal. Those who can, should.

According to HW Charles in The Money Code: Become A Millionaire With The Ancient Code, “Those who love people acquire wealth so they can give generously, after all, money feeds, shelters and clothes people.”

We should strive to be as generous as possible to those in need.

Final Thoughts

Ten commandments of saving money are inspired by scriptures that are timeless. Sometimes ancient words remind us that money management was always a challenge to be conquered.  Choose success by your actions in saving money as a first step to be financially secure. There are tradeoffs in every financial decision you make.   I know that these days have been difficult for many because of the coronavirus outbreak. It will take time to get back to normal given the still raging health crisis and an economic downturn. In the meantime, stay healthy.

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