The other day I was riding my bike coasting along not really paying attention or having a destination in mind. I was enjoying the warm balmy air and easy pace. Things were perfect until I turned at an intersection and started pedaling up hill. The natural thing to do is to shift gears to make cycling up hill easier. When I shifted I not only felt a resistance but also heard a disturbing “crunch” sound. The chain had popped off and I came to a dead stop. Obviously, something was out of synch on my bike and I wasn’t going anywhere until I could get the chain unstuck and back on to the chain wheel. After pulling and tugging on the chain and getting my hands greasy I was able to get the chain on the chain wheel and cautiously pedal home before it happened again. Hindsight told me I should have taken my bike to the shop several months ago when I first noticed my gears were not shifting smoothly. Fortunately, I was able to get my bike fixed and not incur any major expense. If I had taken care of the problem initially I never would have had my smooth ride interrupted.
A similar situation can happen with money. It is easy to coast along day-to-day and not pay much attention to your money until something unexpected happens. Using ATM cards, credit cards and setting up automatic payments online makes it convenient to spend money. This works well until an overdraft notice shows up, a forgotten annual payment is due, late fees are added to an unpaid bill or the interest rate increases on a credit card. Then “crunch” it can feel like a smooth ride coming to a dead stop. Just like keeping up with bike maintenance to insure a smooth ride every time having a plan for day-to-day money maintenance will insure confidence, less stress and peace of mind. Here are some steps you can take for a smooth ride with your money:
Plan a destination: At the beginning of the month figure out what you are going to spend. Make a list of expense categories and fill in amounts you anticipate you will be spending. List income categories and fill in the amounts you expect to deposit. Ideally, the bottom line will be a positive number. If not, adjust the plan to get to the result you want.
Maintain tire pressure: For an optimum ride you will want to track (record) expenses and deposits on a daily basis. Tracking will help you stay conscious of and connected to your money. It gives you clarity so you can notice any habits or patterns that may keep you from attaining control of your finances.
Oil the chain: This is recommended to do twice a month. At midmonth add up all expenses and deposits tracked in each category. Are you on target with the original plan or do you need to make adjustments to continue on a smooth ride? Do not wait until the end of the month to review your plan. It may be too late to adjust for the result you planned at the beginning of the month.
Avoid potholes: Be aware of the subconscious messages that don’t want you to change, temptations to make purchases not planned for the month and the excuse of a busy life that makes it easy to procrastinate on daily tracking.
Apply the brakes: If expenses are greater that income every month it is time to apply the brakes or you will be rolling down a hill and gaining momentum that soon gets out of control – CRASH!
Yield to traffic: interest only loans, refinancing for purposes other than for home improvements, buy now pay later offers, discounts off purchases by opening a new credit card account – these offers come fast and frequently. Be careful or you may get hurt big time!
Wear a Helmet: Avoid exposure if disaster strikes. A temporary job loss could be devastating if money has not been saved to cover living expenses while looking for a new job.
Get a bike lock: Keep your bike and future secure. Once you contribute to a retirement plan lock in that money for future security.
Now it’s time for a smooth ride uphill with your money cycle easily shifting into high gear!