As families look to stretch fewer dollars further, the will – and perhaps the need – to get more out of things they already own rises as well. While it’s certainly noble to make some repairs yourself, or employ a professional, the repair versus replace debate actually becomes more difficult when you practice other frugal habits.

Repairing a worn out item that you bought new at full price might make sense if you would replace it with a similar purchase. If you were to find a significantly discounted replacement at a local thrift store or use a combination of sales and coupons, repair may not actually save you any money. Spending $25 to repair a $100 pair of shoes seems like a smart move unless you got those shoes for $5 second-hand. Should you base your decision to repair or replace based on the worth of the item or the price you paid? Is the repair cost versus replacement cost a better metric for making the decision?

Another factor is that repairing traditionally has the added benefit of not creating the waste of discarding your current item, but that too may be more complicated depending on your lifestyle. If you plan to donate your item, rather than discard it, you aren’t really wasting the current item. Also, replacing it with another used item (that’s either in better shape or a better fit for your needs) doesn’t require a new product to be produced.

With frugal and environment-friendly lifestyle choices, the debate between repairing and replacing items gets more complicated. Though it might be more difficult to make a decision, the good news is that both choices are probably good ones. Either choice has the potential to be cost-effective with limited waste, meaning that you really can’t go wrong.

How do you decide whether to repair or replace an item?

In far too many cases, we wrongly conclude that an event or action is the cause of a result, rather than a mere influence or related occurrence. When analyzing our finances, and indeed our lives, it is important to consider whether causality exists between the event and the result.

A Non-Financial Example:

A recent study compared heart attack victims to healthy volunteers and found the heart patients had a higher number of bacteria in their mouths. Many ne ws outlets picked up this story under headlines like "Brush your teeth, it could prevent a heart attack." But is that really what the research showed? Good oral health has been shown to have many other positive benefits, so it seems to be a reasonable conclusion. Causality may indeed exist between bacteria in the mouth and heart attack risk, but an equally plausible explanation is that someone who doesn’t take care of his mouth also doesn’t take care of the rest of his body. If that’s the case, brushing your teeth won’t prevent a heart attack.

A Financial Example:

If you were to learn that most people filing for bankruptcy have credit cards, you might wrongly conclude that credit cards cause bankruptcy. If that conclusion led you to never have a credit card, you could miss out on the many benefits that using a credit card responsibly can bring, such as a longer credit history, rewards points, and payment flexibility. Irresponsible use of credit may certainly be a contributing factor (or even a cause) of many bankruptcies, but simply having a card is not.

Conclusions drawn from a result back to a potential cause often miss the critical element of causality. Why does causality matter? Without it, you may be focusing your efforts in the wrong place or missing out on great opportunities.

Have you ever taken an action that turned out to have no effect on the desired result?

Credit card borrowing declined in February by the largest dollar amount in recorded history. It fell at an annual rate of $7.8 billion (9.7%).

It’s interesting to see consumers turning away from credit cards during difficult financial times. In the previous report, consumer borrowing rose at an $8.1 billion annual rate for January. At the time, analysts cited the increasing need for credit to pay for things like regular bills as more and more people faced job loss.

It’s possible that the latest decline is partially a result of credit being maxed out for many people who are just as in need of more help, but simply don’t have any more credit available to them. Auto and other personal loans in February rose slightly, at a $313 million annual rate, or 0.23 percent, which adds some validation to this theory. Another likely cause is that consumers are finally starting to get serious about cutting excess and waste from their spending out of necessity.

Consumer spending has an interesting relationship with the economy as a whole. In general, slow economies cause consumers to spend less even though increased spending would aid the recovery. A better scenario is when consumers continue to spend, but do so in more responsible ways, such as relying less on credit cards. By spending while living more within their means, consumers strengthen their own personal financial positions, while aiding in the economic recovery at the same time.

With such large changes in consumer borrowing from January to February, it will be very interesting to see what the March numbers report when they are released this month. The February numbers may be a temporary anomaly, but for the time being they certainly seem to be an encouraging sign that consumers are starting to take responsible actions.

Have you been relying on your credit cards more or less in the past few months?

In part 1 of this post, we met Pete from the spiritually-based personal finance blog, Bible Money Matters. He described why faith and finances go so well together, how his faith influences his finances, his use of the Bible and some financially relevant scripture. Today’s topics are somewhat more abstract, though the answers are equally interesting. Here’s the conclusion of the interview:

M: Do you believe in a world of scarcity, or a world of abundance? The former implies that for you to get ahead you'll need to take away from someone else, and the latter implies that we can all improve our lot in life.

P: Dave Ramsey's "Total Money Makeover" is a good one that mixes in some faith, while not being preachy - good for all audiences. Another good one that I read recently was called "Does Your Bag Have Holes" by Cameron C. Taylor. Anything by Jay Peroni is also good.

Again, thanks to Pete for sharing his thoughts on this subject. Interested readers can learn more at Bible Money Matters. Regardless of your own religious beliefs, sound financial principles, from any source, are worth integrating into your daily life.

Does your faith influence your financial decisions?

Many of our laws and customs have a spiritual basis, so it should come as no surprise that spiritual beliefs serve as a source for financial inspiration and guidance as well. To help understand the complex subject of spiritually-based financial advice, I enlisted the help of someone who deals in this niche topic every day.

Pete Anderson runs one of a growing number of spiritually-based personal finance blogs, Bible Money Matters. He started the site last year as a place to capture his thoughts on matters of his Christian faith and how it affects his finances. Pete graciously agreed to a question and answer session, which I’d like to share with you.

M: Why pair faith with finances?

In everything I did, I showed you that by this kind of hard work we must help the weak, remembering the words the Lord Jesus himself said: ‘It is more blessed to give than to receive [Acts 20:35].’ This reminds me that we are implored to help others, and that giving of ourselves and our money is of the utmost importance.

Now that we have a basic understanding of the topic, we’ll cover some more difficult subjects in the second part of this post. We’ll explore the world of scarcity versus world of abundance, the apparent conflict between spiritual advice and lofty financial goals, differences between spiritual and secular financial advice, and more.

How do you feel about the answers so far?