Finance Coach - Vol. 21

Finance tip: Transport

Driving style. There are certain things that you do while driving that may be contributing to you using more fuel than needed. One to watch is driving for too long in too low a gear. The higher the revs that your engine operates at, the more fuel it uses. To be efficient, change up to a higher gear as soon as possible, without putting your engine under pressure (you’ll know you are if it starts to chug and jerk). Having said that, you should also be wary of trying to accelerate too much once in a higher gear. If you’re in a high gear (say, fifth gear), and need to climb a hill or overtake someone, it’s more fuel-efficient to quickly change down a gear or two, pass the other person or climb the hill, and then change back up into the higher gear. If you try to do it in the higher gear, you need to depress your accelerator pedal harder (to get the acceleration), which shoots up your fuel consumption. Generally, don’t put more pressure or weight on the accelerator pedal than is absolutely necessary to maintain your desired speed. Try lifting your foot just a millimetre or two once you’re at your travelling speed – you’ll stay at that speed, and I guarantee that you’ll use less fuel…

Business tip: Appearance

Make a strong first impression. When meeting people for the first time, they are likely to form an opinion of you within the first seven seconds. It sounds simplistic, but keep the following in mind when meeting someone for the first time (and this applies both in and out of business situations): Be dressed appropriately – if you’re meeting a supplier to negotiate prices, don’t pitch up in shorts. As you approach the other person, make sure that you’re standing up straight, and not slouching or looking at the floor. Make eye contact, and keep your voice firm and level as you introduce yourself – you’ll come across as more confident. Be sure to give a firm handshake, but don’t overdo it – if you try and crush their hand in yours, you’ll come across as domineering, and their guard will go up immediately. If you’re a man shaking a woman’s hand, and don’t know how hard to do so, let her initiate the ‘squeeze’, and respond at exactly the same pressure. And don’t forget to smile – you’ll subconsciously relax yourself and release any tension you may be holding in your face, while also putting the other person more at ease…

Finance Coach - Vol. 20

Finance tip: Entertainment

You can still enjoy yourself on a budget. One of the first areas that people cut down on when they fall on trying times financially is their entertainment expenditure. It’s still very possible, though, to have a good time and let off some steam without breaking the bank – just be innovative in your thinking. For instance, if reading is your way of ‘escaping’, there’s no need to pay through the nose when the new bestseller comes out. Sign up as a member at your public library – it’s generally free and you’ll have access to thousands of books all across the spectrum. If you’d usually fork out for a movie at the cinema, consider waiting for the DVD, or taking in a performance at your local amateur theatre instead (they’re normally so glad to have an audience, they barely charge anything!) Or if expensive dinners were your indulgence, rather organize a dinner party with some close friends. Get everyone to bring something different (eg. one brings a starter, one brings a main, one a dessert, one a bottle of wine) and you can all revel in each other’s company, while saving good money as a group…

Business tip: Strategy

Beware of paradigms. When trying to innovate in your business, always be wary of people who tell you why you can’t do something. They’ll be very quick to tell you that “You can’t do that”, “You can’t charge that little/much”, “It’s always been done that way”, but don’t fall into the trap of their way of thinking. Many industries have unwritten rules or ingrained practices that have formed over time. They’re not necessarily the best or most efficient way of doing things, but they’re there, and people don’t want to be seen questioning them, for fear of being ostracized. But be different. Break the mould. Always ask “Why?” or “Why not?” And if you (or they) can’t come up with a logical, sensible answer, then go ahead and do it!

Breaking down a break-down...

Last week, while driving to and from the office, I couldn’t help but notice the amount of vehicles that had broken down on the side of the road. Now, there would usually be one or two that I would see in a day’s return trip, but last week it must have averaged 7-8 vehicles a day! While most people would only see the inconvenience caused as the traffic slows up, I couldn’t help but try and see what the contributing factors would be…

Assuming that people would not voluntarily stop their vehicles on the side of the freeway in rush hour, there are only really two reasons that a car would come to a stop. The first is that it ran out of petrol or gas; and the second is that it’s had a mechanical or electrical failure. I feel that both of these causes can be quite directly attributed to the stressed economic climate that is affecting everyone. The first is very straightforward: People, in their efforts to stretch their pennies as far as possible, are not filling up as often. They are trying to get as much mileage out of a tank as possible, and consequentially, some of them misjudge just how much they will need to get to work or to get home. They run out of fuel and cough, cough, splutter, splutter – they’re stuck on the side of the road.

While this is evidence of a slight lack of foresight, or trying to push one’s luck one too many times, the second reason has slightly more substance to it. For a car to break down suddenly, there is generally a very serious failure behind it. These serious failures can sometimes happen out of the blue, yes, but I’d say that you’d generally have an inkling that something is not right. In good economic times, when you’re relatively flush with cash, you would have your concerns checked out by a mechanic, and hopefully rectified before they develop into something worse. In tough economic times like these, though, people are obviously not seeing vehicle maintenance as a priority. So they miss a service or two, and try and ignore those worrying shakes and rattles, in the hope that they will go away by themselves. I mean, putting food on the table is more important, right?

The problem comes in, though, when your car does break down (and it will eventually if it’s not maintained – as much as we’d like to think otherwise, it’s still a machine). If you’ve reached this point, you know that it’s going to cost you an arm and a leg to get it going again. And the pain really kicks in when you realize that it would have cost you a lot less to simply have bitten the bullet and repaired it at the first signs of trouble. “But I didn’t have the money!” you exclaim. Well, you could’ve borrowed it, or found a way to make a bit extra to cover the repairs; as it is now, you have to borrow or find it anyway, and you have to get your hands on that much more.

This is just an example of the downfalls of short-term thinking, and how it can lead to never getting around to the things that need to be done. In this example, the short-term view of not wanting to take the hit at first means that the hit hurts that much more when it does come. But the principle applies to everything: I’ll start saving next month; I’ll reinstate my insurance when the economy recovers; my diet starts on the first; I’ll pay off my debt when I get my bonus – heard these before?

Do what needs to be done now: Don’t leave for tomorrow what can be done today.

Finance Coach - Vol. 19

Finance tip: Education

Increase your financial education. To be able to better manage and control your finances, commit to learning more about your money and the financial world around you. You might think this is a daunting task, but it’s really not – start small and slowly, and build a progressively higher knowledge level over time. Read the business section of the newspaper; watch the financial news roundup; listen to your colleagues when they talk about money or their finances (don’t tune out like you normally would); follow financial blogs (like Finance Coach!); ask questions of family and friends who have a better grasp of it than you do; take a short course (banks often offer them for free); whatever you do, just expose yourself to the commercial side of the world. And if you feel completely perplexed at first, and have no idea what it is you’re reading or hearing, don’t worry. If you keep at it you will, over time, start to recognize terms and themes, which will then help you understand others, which will then help with others, and so on and so on. Whatever you do, just get started!

Business tip: Communication

Follow good phone habits. When you’re using a phone for business purposes, there are a number of small things you can do to maximize your effectiveness. For instance, when you answer an incoming call, sound professional. Don’t just say “Hello?” – try and have a more standard answer such as “Hi there, Gareth speaking.” This immediately tells the caller that you value their call, by being professional and courteous from the moment you pick up. If you’re a small business (especially if you’re a one-man operation) get someone else to record a voicemail message for you – it gives the impression that you have staff working for you. Studies have also shown that having an attractive female voice on your voicemail makes you seem more trustworthy and authoritative. And stand when you talk, don’t hunch in your seat. Standing opens up your airway, and allows you to better project your voice – helping you to sound confident and on top of things.