Missing A Step

August 02, 2010

A caller to our financial helpline told me last week, “ I am terrible at money management.”  Well, after talking to her for a few minutes, I realized that she really wasn’t.   She confessed that she was always on the watch for when her bills were due and she paid them on time watching for the big ones so she didn’t miss them.  In other words, her rent and her car payment were always paid on time.  Does that sound like she is terrible at money management?

She felt like she was because her money seemed to run out before her month did and she was always stretching.  Like many people, she had some skills.  Projecting was something she excelled in.  The way I saw it, she was just missing a step – one thing that could make the difference.

I had a similar experience when I took a ski lesson last winter.  If you saw me ski, you would know that I am a beginner – well maybe advanced beginner but if you get me on an intermediate slope and I make a turn, you’ll see immediately that I am on the wrong run.  I stick with green and stay away from blue and anything black.  That was until I took a lesson from a 75 year old ski instructor named Paul.

My husband’s ski instructor was not 75, she was more like 25 and blond and beautiful which is why he completely forgot that we were supposed to meet for lunch to talk about our lessons.  This did not bother me one bit because Paul taught me one thing that changed my skiing forever – turn in on the edge of the inside edge of the downhill ski when you turn.  He showed our little group on the bunny hill, then took us to the green hill and then in a moment of profound glory, we tried it on the blue hill.  And… it worked!

I could turn!  This opens up a whole new world for me.  No longer will I be left behind in the powder by my friends and family because I, Nancy Anderson, will be able to get down the hill without falling on every single turn – only a few.  That one step or teaching moment made a difference with me.

The teaching moment I had with my caller was to “look back.” She was only looking ahead and projecting.  Adding a look back to see where your money is going and analyze a month or two (or three) of your spending is the first step in learning to budget. Otherwise, you are really driving blindly – moving ahead but not really knowing where you are going.

You can take those same analytical skills you use to project when your bills were due and sit down to see where you are spending your money and use that information to create a budget by setting spending targets and tracking your spending every week.  That simple step can turn a financial life around.

When you do your budgeting add another step to save for ski vacations and look up Paul in Park City Utah because I’ll bet he is still teaching this season.