Do You Have a Financial Base?
If you've ever logged any meaningful mileage on a dirt road, track, or along a trail, you know all too well why it is important to have a strong runner's base.
A runner's base is essential to sustaining a running routine. If you do not have one, regardless of what your heart tells you, your body will tell you something quite different - you ain't ready!
Doing too much too soon can turn you off to running. Let's be honest. Who wants to do something they hate doing? Not me. Doing too much too soon may also result in injury. This means you can't run. If you can't run, you slowly begin to lose the little bit of base you established. This is why it feels like starting over when you are healthy enough to run again. I've experienced both sides of the equation - multiple times.
Oddly enough, we do the same thing with money. Or, at least, I have.
I use to get so excited about my financial goals that I would fail to prepare for the process necessary to achieve them. Much like running, I overlooked the importance of establishing a base. My heart was telling me full speed ahead while my money was telling me to slow down - trouble is lurking around the corner. I didn't listen—the result: a financial mess that forced me to slow down and start all over again. A lot like my running experiences - LOL!
I wonder if being a boneheaded runner is associated with being a boneheaded manager of money? :)
So, what is a financial base? A financial base ensures you have a financial strategy that reflects your current capacity to achieve a financial goal. Case in point, let's say your financial goal is to have a credit score of 740 or higher. To achieve and sustain this goal, you must understand what you'll need to achieve this end. The two biggest parts of the credit scoring process are paying your bills on time (35% of score) and keeping your credit utilization below 30% (30% of score).
Creating a financial base means you will need to structure your financial affairs to pay your bills on time and not run up your credit card balances. You'll need to establish a spending plan to support your credit score goals. If you currently have significant financial constraints, you may not want to create a spending plan - it just reminds you of your situation. To achieve your financial goal, though, we have to address the need for financial stability, establish a spending plan, stick to it, and structure your financial affairs so that you can pay your bills on time and not over-utilize your credit cards to achieve a 740 credit score. As you can see, without a sound financial base, the goal was not as accessible as we might have thought originally.
I want to be very clear about something. You can achieve your financial goals. You just might be doing too much too soon. You have to learn how to win where you are to win where you wish to be.
When you get a chance to reflect on your current financial journey, might there be a few opportunities to cut back on what you are doing? Can you identify a few situations where less is more? In fact, I would much rather you focus on your financial base than your financial goals. Use your financial goals as a way to identify your financial base so that you can focus on it. The rest will take care of itself.
I know what I am suggesting goes completely against the grain of our culture. But I am convinced that our culture is not setting you up for success. If you want to achieve your financial goals, establish your financial base, and gradually build it over time. You will notice two things as a result: You will enjoy the process, and you won't injure yourself along the way.