Can you improve your MPG like your BFI?

Do you know anyone who worries about where their money goes?

Do you know anyone who worries about their car's gas mileage?

These two concerns are similar in that the benefit you get from using gas (MPG) and money (BFI) can be improved if you know how. There is a multitude of well meaning financial gurus on the Internet, in bookstores and at seminars who tell us, sometimes for payment, how to improve our finances. There are only three strategies that are consistently suggested.

Let's imagine how the three entrenched methods that the gurus recommend for managing household finances would work when applied to improving gas mileage.

The first step for upping your MPG is to add a second, third or more gas tanks. With the extra tank capacity you can go farther between fill-ups. This strategy may not improve your mileage, but, you will get to go further until the needle approaches empty. It will feel like your MPG is higher.

By far the most preferred method for improving MPG is to plan how your gas will be used. You do this by sitting down each month to draft a trip plan for the following month. First, you add up how many gallons of gas you will be buying during the coming month. Then you list all of the trips you will be making such as to the grocery store, to soccer games, to PTA meetings, to work, to ... you get the idea. Every time you will be driving your car someplace during the next month must be anticipated.

Then you decide how many drops of gas are to be used on each type of trip. Every drop gets a job. If, when you get to the bottom of the list, there are either drops left over or not enough, return to the top and recalculate the entire list until every drop of gas is assigned. You may want to add or remove trips to make the plan work.

During the following month, before driving anywhere, you measure how much gas is in the tank (or tanks). After each trip you again measure how much gas is left. The amount of gas consumed is deducted from the drops you decided to use on that type of trip. In this way you ensure that gas consumption for each type of trip is staying within assigned drop limits. If you need to make a trip for which all assigned drops have been consumed, you either stay home or reassign some drops from another type of trip. If you have to make an unanticipated trip, such as to attend an unexpected funeral, your trip plan for the month might not survive.

A variant of the preferred method is to skip the trip planning and just keep track of gas consumption. Known as drop tracking, you accumulate a record of how many drops have been burned on each type of trip. The intent is to provide you with a historical guide for deciding which trips to take in the future. Such a trip record comes in real handy when the kids call to be picked up from soccer practice. You can consult your drop consumption record to decide whether driving over to pick up your children at the soccer field is in your best interest from a drop consumption perspective. 

Not working for ya? Of course not.

Increasing gas capacity and planning consumption per type of trip are patently ridiculous. The proper way to improve your car's MPG is by paying attention to each of the factors that impact gas consumption. These factors are actions and activities that you perform to maintain or improve your MPG as well as to keep your car running smoothly.
  • Easing up on the gas pedal.
  • Buying the octane recommended for your car.
  • Maintaining proper tire pressure.
  • Removing that empty roof rack.
  • Changing the air filter when recommended.
  • Changing the oil and oil filter when due.
  • Having your engine tuned up on schedule.
  • Keeping fuel injectors clean.
  • Unloading all unnecessary extra weight.
The same is true when it comes to managing your household finances. You want to get the maximum Benefit From your Income (BFI). Unfortunately, the three methods recommended by the financial gurus for managing household finances work as poorly when applied to your income as they do when used to improve gas mileage.
  • Adding extra income, or getting a side hustle, may increase the money you receive, but, bringing in extra money will normally not improve your BFI. The extra income will tend to disappear down the same black hole that makes your paycheck mysteriously disappear. I'm not saying earning extra money is a bad thing. My contention is that side hustles are not to be considered as the most effective fix for not being able to pay your bills. Side hustles, in my opinion, are to be undertaken because (1) you enjoy doing it, and (2) you don't need the extra income.

  • In meteorology and manufacturing, there is only one thing that is considered true about forecasts ... they are wrong. The same is true about budgets which are nothing more than personal forecasts of spending for the coming month. Those who preach budgeting as a panacea for money woes rightfully caution that you probably won't see much improvement in your finances possibly for years. One guru preaches taking baby steps toward gaining control of your day-to-day finances. Inching forward like a toddler is an appropriate analogy when the primary method being used for planning household finances is guesswork.

  • Tracking expenses to maintain a historical record of where your money has gone is a good practice for preparing expense reports and possibly for tax return preparation. For household expenses, however, keeping track of where your money has been spent is like walking backwards wherever you go. You get an excellent view of where you've been, but, avoiding upcoming monetary sink holes is nearly impossible when you're doing a financial moon walk.
With at least 3 out of 4 people in the United States not preparing budgets and continuing to live paycheck to paycheck, I think it is safe to say that the methods for managing day-to-day finances that financial gurus continue to advocate (side hustles, budgeting, tracking expenses) have failed. This conclusion is substantiated by the fact that, as indicated by Federal Reserve statistics, the ever rising total consumer debt in the United States was nearly $3.6 trillion in April, 2016. According to statistics published by the Census Bureau, that works out to over $11,140 in debt for every man, woman and child that lives in the United States. This debt does not include mortgages.

In my opinion, it is way past time to take a fresh look at how to improve everyone's BFI as well as how to keep their household finances running smoothly. The core issue is very poor financial visibility which is a measure of how clear and complete the picture is that a person has of their day-to-day finances ... both now and in the months to come.

How about you? How would you rate your financial visibility? Can you see, in one place, your income, spending money, bills, credit cards, large purchases and savings? Can you see at a glance how healthy your household finances look for the next 12 months?

Subscribe to join the discussion. We'll be looking at how easy it is to improve your BFI by raising your financial eyesight to 20/20.

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