In the ongoing quest to make changes in my daily life and improve my cashflow, I recently changed automobile insurance companies to get a better rate for the same coverage. The savings will be $40a month or $480a year but the switch came with a price: to get there, I would have to install a monitor and make some changes to how I drive. Let’s see how changing habits can have an impact on cashflow.
You may have one of these devices; a small unit that plugs into your vehicle’s computer system and measures your acceleration, deceleration, how you stop, and how much you drive. If you quickly accelerate from a dead stop when the light turns green or hit the brakes hard to stop, the unit will beep to let you know you’re driving in a manner that may be unsafe or, at the least, is putting unnecessary wear and tear on your car, truck or SUV. Drive safely and you get a great rate. Drive recklessly and you pay more and maybe worse.
Speed limit? What speed limit?
I’m not a speed demon but I have been known to say the speed limit is “just a suggestion”. As a Type-A personality, I’m always moving fast, including on the road. That means I start quickly when the light turns green and try to beat the next light before it turns red. Usually, the lights are timed so that being stopped by one light means I’ll be stopping at the next and instead of traveling at a rate that would allow me to come to a rolling stop, I try to beat the light but end up stepping on the brakes when I realize I can’t safely make it through the yellow light.
Then comes the “BEEEEEEEEP!”
Wanting to avoid that annoying sound and make sure the rate I’m paying remains, it only took a few hard stops-and that electronic monitor scolding me-before I began to change my habits. I accelerated a little more slowly, didn’t reach the speed I normally do, especially on city streets, and anticipated the changing lights. Now I’m coming to a stop more slowly. I also learned to leave a few minutes earlier so as not to be pressed to speed.
Within about a week, the beeps became less frequent and now, after a month, are almost nonexistent. With unspoken encouragement and a “gentle” reminder, I changed a habit that is improving my cashflow.
Here’s what that little inanimate object has done to make me money: lowered my insurance cost; reduced wear and tear on my tires, brakes, engine and transmission, and in turn the price for repairs and replacement; and improved my gas mileage by over 10%!Cha-ching!
Added to the recent change in my internet and cable provider, which saved me over $100 a month. Also discontinuing a couple of digital subscriptions I no longer use but for which I’ve been paying monthly. I have improved my cashflow and have $2,000 a year. I can use that to pay down debt and invest in instruments that will earn, not cost me, money. Unless you’re in a position where that amount of money
is what you carry in your wallet as spare change, $2,000 is a significant amount of money, especially for a small business owner.
Change a habit? How hard could that be?
Sometimes, we look at changing a habit as impossible. We imagine all we have to do:
- Whether it’s how we drive
- What we eat
- When we exercise
- What we do in the course of our business day, and the tasks seem daunting.
However, if we were to realize that making small changes and doing them consistently will turn into positive habits and then lifetime improvements, we see they aren’t so hard and the payoff is significant!
What habits could you change to improve your cashflow and what will it take? How about setting a recurring date in your calendar to review overhead expenses and look for places you can reduce them without compromising products or services? Putting more money in your pocket. Making it a point to meet more than once or twice a year with your accountant or CashflowGPS advisor to review your portfolio and make adjustments to get the most out of what you’re investing. Or not making those small daily purchases for things you could do or make yourself? (Remember my blog on the 1%difference? If not check it out.)
Maybe, like the device in my car, you need reminders until tendencies become habits. If so, find a friend, colleague or coach who will hold you accountable. Set times and alarms to notify you when to take on or complete a task. Visualize the positive outcome when you finally make that “I should do” into an “I am doing” habit.
Share what habits you’ve been able to create to improve your cashflow, big or small, with our community by commenting below. We can all learn from each other!