Saturday, January 28, 2017

Inch One Hundred Fifty-Five: What Norm Said

With most of January behind me, and two paychecks deposited and accounted for, I am surprised at what I have already learned from my new way of tracking my expenses and monitoring my spending. 

What have I learned? Tracking my cash flow visually instead of mentally makes me far more inclined to watch when, where, and on what I am spending money. Given that I do not spend casually or freely to begin with, this revelation has made my current strict money policy a little more flexible.

So I was thrilled to read that my personal discovery was validated by Norm Brodsky, a columnist for the magazine Inc.

Inc. is a magazine aimed at entrepreneurs, business start-ups, and small businesses. I first read it back in the 90s after I received a free subscription as a lawyer. A few years ago, after a long hiatus, I subscribed again.

I'm not an entrepreneur. I'm not a venture capitalist. I am not burning (or even warming) with desire to start a business. But I do find the magazine irresistible. One of the many features I look forward to is Norm's monthly column, "Street Smarts."

In the most recent issue, Norm wrote about getting a feel for one's new business by setting aside the spreadsheet and the P & L statements and approaching the company finances differently. "By writing the numbers down [by hand] and doing the calculations yourself, you begin to have a feel for the relationships between them."

Norm is right. And somehow I managed to stumble on that insight when I reassessed my financial forecast for 2017.

February is almost here. January held an unexpected medical test. With my insurance out-of-pocket costs reset to zero at the start of the year, my projected out-of-pocket contribution (payable at the time of the test) hit my expense account. Hard. Thanks to my paycheck exercise, I could see where the balance of the cost would come from without threatening my fixed expenses. Better yet, I could pencil (well, pen) out my numbers and see the the deposit that would start replenishing my depleted account.

By working the numbers by hand, instead of whirring through them over and over in my brain, I could feel it. What a great thing.

Just like Norm said.

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