Is The Check Engine Light On For Your Finances?

by Tim on March 19, 2012

It usually catches you when you least expect it and often means that you’ll be shelling out some money in the near future.  Yes, I’m talking about the check engine light in your car. (Were you expecting me to say kids?  I suppose that works too!)

When the computer system in your car recognizes an issue, it tries to warn you by turning on the check engine light.  If you’ve never experienced this, your initial instinct might be to bring it to a shop.  While that would work, you can actually take it to a major auto parts store like Autozone or O’Reilly’s to have them test what the problem.  The nice part is that they’ll do it for free!

This little tip can save you hundreds of dollars of unnecessary expenses, especially if you’re able to replace the part in the parking lot of the auto parts store.  I know that I’ve saved a lot of money that way!

3 ‘Check Your Finances’ Lights to Watch For

Wouldn’t it be nice if taking care of financial issues was as easy as waiting for a light to warn you of a small problem before it becomes a bigger one?  Unfortunately, we all see small signs within our spending habits that we end up ignoring, which ultimately leads to even more expensive ‘repairs’ down the road!

Repairing your finances can be a lot of work, so make it easier on yourself and your family by looking for these financial warning signs.

1. Unexpected Emergencies Always Popping Up

Life happens to everyone.  Car repairs, emergency room visits, and broken washing machine take people by surprise everyday.  For those who have a sufficient emergency fund (3-6 months as a goal) the surprise is often followed by a sigh of relief since they have enough savings to cover it.

But for families who don’t have an emergency fund, it can feel like a constant battle to come up with money for the next problem.

The warning light: Feeling unprepared by unexpected expenses.
The fix
: Build an emergency fund of at least $1,000 and work to build it up in the coming months.

2. Giving Opportunities Pass You By

People usually want to be generous, but when their financial house is a mess, it’s easy to let giving opportunities pass by.  Your good intentions can become overshadowed by those emergencies, especially if you don’t have a strong emergency fund.  If you realize that your giving has taken a financial backseat, try to set aside money from every income stream (not just your main paychecks).  This helps you to make giving a priority – if you don’t give from the small dollars, you’ll never give from the big dollars!

The warning light: You want to be generous but you never have the money to give. 
The fix:
Set aside money from the small sources of income and make it a priority to work on setting aside money from all income sources.

3. Increasing Standard of Living

This is the most difficult warning to notice because it usually creeps up on us.  Look around you and ask yourself the question of ‘why’ you have certain items.  It’s a difficult exercise, but it will help you to see if you’ve allowed your standard of living to increase.

Sometimes these reality checks are the very things that we need to remind ourselves of how much we actually have.

The warning light: ‘Upgrades’ have become a normal part of your life.
The fix: Ask why you’re looking to upgrade to something new and be honest with yourself.

When was the last time you looked at your financial check engine lights?  Are there things that you do to make sure you’re on track financially?

Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.

email

{ 2 comments… read them below or add one }

Jenna, Adaptu Community Manager March 20, 2012 at 3:19 pm

I’ve recently re-committed to tithing. Planning my budget with 10% less has been a pretty good exercise.

Reply

RobertJaeger April 11, 2012 at 1:45 am

Repairing your finances can be a lot of work, so make it easier on yourself and your family by looking for these financial warning signs.

Reply

Leave a Comment

Previous post:

Next post: