Course Corrections

June 10, 2008

Course Corrections

I took a car service to work today. (Yes, I’m all about debt-reduction, but New York City is in the middle of a hellacious heat wave and, statistically, I’m in the group that shouldn’t even stick my nose out the door in it — older, fair-skinned, breathing problems….)

Anyway.

The car had one of those little LED compass displays in the mirror; you know…they show what direction you’re travelling in at any given moment.

Now, I know my job and my home are about 10 miles apart as the crow flies (if a crow would dare in New York City), and that my job is northeast from my home. Anyone looking at a map of Brooklyn, NY can tell this — even a non-driver. What you cannot tell by checking the map, however, is that the easiest, fastest way to get from one to the other is, by no means, a straight ten-mile trip.

The majority of the trip is along the Belt Parkway, which hugs Brooklyn’s shore. Most of the trip, therefore, consists of a series of course corrections: SE to E, to NE, to N, to NE, to N, back and forth (all the while in a generally easterly direction) until we get off the Belt and go NW, then W.

So. All well and good. But how does it relate to financial recovery?

Financial recovery is also a series of course corrections. You move forward, then back, then a bit to the side, then forward again; somehow ending up a little closer to your goal with each step.

Let me give you an example from my own life. Two years ago, I decided to work aggressively at financial recovery. With no bank account it wasn’t easy, but I managed to pay off all my credit cards but one by last July. Last July, I decided to get aggressive about savings. I banked most of my summer pay instead of spending it. By September, I was regularly paying my bills on a current basis, and I had signed up for Suze Orman’s Save Yourself program, in time to get in on the deal she made with TD Ameritrade. This deal stipulated that if you paid $50/month into a money market account with them, after twelve months, TD Ameritrade would add an additional $100 to your account. I also moved $200 from my savings account to a one-year CD at ING Direct, with a higher interest rate than my credit union was paying. And, I still had money in my savings account for emergencies. All steps forward, to one degree or another.

Then came September. Each fall, the city pays us the last of the prior school year’s pay when we come back. Some years, they then hold our first paycheck for an extra pay period. This was one of those years. Added to this was the fact that I owed my employer seven sick days rom the prior school year, which had occurred after the summer checks had already been processed. That money all came out of my first check for the new year. I had enough in my emergency fund that I only had to borrow about half of what I needed to get through until we started getting our checks again. One step forward for having the money, a half-step back for still needing to borrow. I have been trying to save from each check since, but there have been a few health emergencies, and a couple of months where there were shortfalls on the rent that had to be fixed so I’d have a roof over my head.

Knowing that these were temporary setbacks, rather than obstacles that would kill my progress — in other words, course corrections, I was able to keep from beating myself up over my “failures.” Each time, I noted how I was handling the emergency differently than I would have a few years ago, and kept reminding myself that each handled emergency was actually moving one step closer to my goals.

Further, I will keep paying myself first until I have that emergency fund built back up (and not beating myself up for using it for real emergencies).

So. All those little back and forth movements along the path to financial recovery — those course corrections, if you will — are small, conscious decisions we make that will ultimately get us closer and closer to our goals and, finally enable us to reach them!

What course corrections have you had to make in your route to financial recovery? How hard or easy have they been, and how did you feel with each bit you gained toward your goal?

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