Residents of Colorado are extraordinarily knowledgeable when it comes to protecting the environment. As the most active and ‘outdoorsy’ state in the nation, we appreciate our natural treasures and try to be great stewards of them. We know to do things such as monitor our thermostats, avoid bottled water, and use reusable grocery bags. But if my listeners and callers are any indication, Coloradoans are less adept at being stewards of their own finances. On this week’s show, I explained why people need to save their own finances before the try to save the planet.
When I come across people who care deeply about the environment but whose finances are in shambles, I’m reminded of Dickens’ character Mrs. Jellyby who devoted so much time and energy establishing a faraway mission in Africa that she neglected her own children. It’s common for people to let distant concerns distract them from more immediate problems. Or, perhaps, people fixate on faraway problems because it distracts from more immediate problems, like finances. But household problems will always be more urgent for individuals than issues like the environment, and so every individual should give themselves and their finances precedence over all other concerns.
As an example, many environmentally conscious consumers will spend more money—sometimes substantially more—on things like hybrid cars and certified organic produce even when their budgets cannot support such purchases. Being a good steward of your finances means getting in the black as soon as possible, which means practicing prudence and frugality whenever possible. It means clipping coupons and searching for sales. It means utilizing services like Wal-Mart’s price matching and coupon matching to get the best deals possible. And it means opting for a substantially cheaper compact car versus a Prius. But it also means knowing when to spend more now to spend less over the long term. For example, instead of buying a $1,500 clunker from a used car lot, it would be wiser to spend $10,000 or more on a higher quality car to avoid costly repairs and maintenance that, over time, will see the $1,500 car cost more than the $10,000 car.
When it comes to financial stewardship, there is nothing worse than debt. Debt is like a hole in the bottom of a bucket that keeps leaking as you attempt fill it. People acquire debt and soon realize they’re spending hundreds of dollars each month just on interest payments. It’s all they can afford just to pay the interest, leaving them poorer while doing nothing to diminish the amount of debt they have. If you have any debt, your first priority should be to eliminate it. Any monthly savings achieved by paying off one card or loan should then be applied to other loans until they’re eliminated one by one.
Fortunately, great financial stewardship will afford you the luxury of caring about other things, like the environment. If you’re secure in your finances and in your retirement, you can safely and comfortably spend time and energy on charitable causes you care about. The important thing is to remember that secure finances must come before all else. Once you have saved your finances, you can proceed to save the planet.