Episode Transcript
[00:00:00] Speaker A: It's Tuesday. That means I have Mansa Musa on the phone with me. And Mansa today we're going to continue on how we can better our lives by decreasing our debt. And today we're going to talk about cost avoidance. Now when I think in my mind what cost avoidance is, I see myself running away from sticker shock or something like that. Can you explain what that is?
[00:00:25] Speaker B: Yeah. Let's talk about what cost avoidance is and also what it's not. Now, for most working class families, money is a limited resource. For a lot of people there's often more month than money. So today we're going to talk about cost avoidance as a strategy. Now, cost avoidance is money you never have to spend because you took smart actions earlier.
Now let's be clear about what it's not. First of all, cost avoidance is not savings. Savings is setting money aside that you already have for future needs.
Cost avoidance is not cutting back or skipping purchases.
That's austerity. That's a different strategy.
[00:01:11] Speaker A: Okay.
[00:01:12] Speaker B: Cost avoidance is not buying something on sale and calling the different savings.
If you spit the money, you spit the money.
[00:01:21] Speaker A: Okay.
[00:01:23] Speaker B: Cost avoidance is about preventing future exp from showing up at all everyday. Examples, basic maintenance on your car and home. Do you do that so that small problems don't become big deals. Energy efficient habits so your monthly utility costs stay lower.
Simple upkeep choices like that can shape what your future bills look like. Now another form of cost avoidance people don't think about is buying quality and things you're going to need anyway.
[00:01:55] Speaker A: Okay.
[00:01:55] Speaker B: You have to buy clothes. The question is whether you buy cheap versions over and over or you buy durable versions once and avoid repeat purchases.
Now this works best for adults because kids outgrow everything.
[00:02:11] Speaker A: Exactly.
[00:02:12] Speaker B: But with basics like shoes, coats, especially winter coats, jeans, everyday work clothes, especially if you're not chasing fashion trends. Those are durable things that you spend once and avoid the next five purchases. Now another major area of cost avoidance is reducing unnecessary involvement with the health care and criminal justice system.
[00:02:38] Speaker A: Yes.
[00:02:38] Speaker B: The point is simple. It costs money to interact with the medical system.
It costs money to interact with the legal system, period. Full stop.
Preventative care is better than critical care.
[00:02:54] Speaker A: Yes.
[00:02:54] Speaker B: So we're not saying don't go to the doctor.
[00:02:57] Speaker A: Right.
[00:02:57] Speaker B: But don't wait to go. Now over the decades as a financial coach, Randy, I've seen the setbacks that people regret. Most are usually self inflicted ones, not just because of the immediate hit, but because of the long term collateral damage. Speeding tickets, DUIs, don't just cost you money once they raise insurance rates for years. As I said earlier, ignoring health until it becomes a crisis can reduce your income, limit work options, and permanently change a family's financial direction. So these are the kinds of choices that create expensive consequences that linger. Now. Another drain on working class households is fees.
Penalty fees, convenience fees, shopping fees, small charges that add up over time.
When families step back and take a look at what you're paying in fees, you'll often find opportunities to avoid costs there.
One other one, your credit score increasingly affects what you pay for insurance, so maintaining strong credit is a form of cost avoidance.
So cost avoidance doesn't just show up as money in your account, but over time it changes the math of your life by shrinking future bills before they ever arrive. So cost avoidance, focus on it and don't pay any more money than you have to.
[00:04:30] Speaker A: That is such sound advice, Mansa. If you really dig into what you're spending and the extras that could be saved, you could probably see that your money is literally going down the toilet. Or we're going to put this up on the website attakecontrol Tuesday.com and make sure you check out the archives as well. Share this information because it is so important to all of us. And as always, Mana, thank you, thank you.
[00:04:55] Speaker B: Remember, cost that I avoid today is money I don't spend tomorrow.
