A while back, my wife and I had a “little” problem in our home. We had some mice. Not a mouse…mice…as in more than one, which I guess is normal. It was dirty and annoying!
Looking back on the situation, it gave me some valuable lessons in personal finance that I will never forget. I’m not sure how my brain connects catching a mouse with personal finance, but stick with me here.
The Night it All Started
One night, I opened up some of the drawers in our kitchen and saw some little pellets of poop. After being thoroughly grossed out, I came to the realization that we had what I thought was one mouse.
So what’s a person to do? KILL THEM!!
We went to Home Depot, bought some of those No-See, No-Mess mouse traps (mostly to protect our girls) and set them up at home. A couple of days later and we caught TWO mice! Sweet! I thought the problem was solved after that.
Catching two mice instead of one should have been a dead (no pun intended) giveaway that we had a bigger problem.
A couple weeks later, the microwave started making some loud noises and spitting out wood chips from the vent. Yes, you read that right. Wood chips. They don’t use wood to build a microwave! As it got louder over the course of a week or so I would start to hear tiny squeaking coming from it.
We took the microwave down, took it apart, and found a huge mouse nest in the vent near the motor. The nest was causing the loud noise inside the microwave every time it would run.
As we were cleaning out the nest, we found four dead baby mice in there that I assume died from the heat from the motor. We were able to clean out the nest all the way and the microwave works like it never had a mouse nest in there in the first place.
We also patched up a giant hole we found behind the microwave with nails and some foaming rodent repellant to keep any mice out.
Here are five things that trying to catch a mouse taught me about personal finance!
Number 1: Pick Up the Crumbs
Having two little girls at home, sometimes we don’t always clean up completely. That was our first thing to really try and do when catching the mouse. The house was filthy and we needed to clean it.
In the financial world, if things are messy you are less likely to catch a mistake in your bills. You may think you have more money than you actually do, go out and spend it, and then overdraft your account because you forgot that the automatic credit card payment was coming up.
The thing to do is to clean up and know exactly where your money is going. Know exactly how much you have coming in each month and how much is going out for bills. File those receipts away so your desk isn’t a mess anymore—or throw them away after you enter them into a spreadsheet.
Things tend to be neglected or forgotten when it gets messy. Cleaning up is the first step in catching your financial mouse.
Number 2: Fill the holes
Find out where the problems are coming in. If you know that you tend to impulse buy when you go to the mall then don’t go to the mall. If a new video game comes out and you want it, wait till it is on sale or goes down in price. This gives you a chance to save a small amount for it as well.
One of my weaknesses and a hole where problems used to come in for me, was my love of no-interest financing. It’s great that I try to only finance purchases at 0%, but it got me into trouble. I had way too much debt and way too many interest-free cards with balances on them.
The holes in your finances are also where money is leaking out. Do you have credit cards that are charging interest? That is a leak in your money.
One of our biggest focuses paying off debt last year was our Disney Vacation Club Loan. The initial loan amount was about $12,000. If I had decided to take the entire 10-year term to pay it off at its more than 11% interest rate, I would have been charged around $18,000 for the total amount.
That’s $6,000 extra!
My Disney Vacation Club Loan was a leak in my finances because I was paying someone else interest to finance the loan.
I recommend setting yourself a plan to pay off your debt as soon as possible.
How would you set a trap financially? When you try and catch a mouse you have to set the trap and then just check on it every couple of days. You have to keep checking it to make sure there is no mouse or the bait is still good. Other than that it’s automatic.
So our “trap” in the financial world is to set things automatically. One of the best things you can do is to do automatic transfers into your savings account. Then, add it to your list of bills and treat it like you would any other bill.
This way, whatever amount or percentage you are transferring to savings each month can’t be touched. It literally takes no effort to keep this going.
And like checking a mouse trap every couple of days, you can check on the amount that’s going into savings every couple of months. Checking it will let you know if it’s putting a burden on your finances or if you are saving too little.
So what kind of traps can you set if you are unable to do a “savings trap?” What you can do to start is schedule automatic payments on some of the bills you have. If bills are scheduled and you take out the human error of forgetfulness then you assure yourself that there will be no late payments.
Just like how interest on credit cards is considered a hole in your finances, another hole is late payment fees. Any money that leaks out is a hole. The trap you set is the automatic payments so you don’t forget about it.
Just be sure to keep track of it with your bank so you don’t get nonsufficient funds fees (another hole in finances).
Number 4: Keep it Clean
Now that we’ve cleaned up our finances, filled the holes in our finances, and then set a trap to ensure we catch the financial rodents, the next step is keeping things clean.
This is its own step because it really is such a big part of the process. You see, mice can chew through almost anything. If they sense there is food they will find a way to get to it. In other words, if you don’t keep it clean then mice will continue to stick around.
Same thing with finances.
If you clean up your finances once and then let it go right back to the way it was you are fighting a losing battle. Now is the time to clean it up and keep it that way. Set yourself a budget, stick to it, and keep everything organized. All of these things will allow you to keep your financial rodents out.
Keeping things clean involves knowing where everything dollar of your money goes. If you have everything clean and know where everything is going then it’s that much easier to do things like pay off your debt, save for a vacation or a down payment on a house, or even start an emergency fund.
The more organized and clean you are with your finances, the easier it will be to manage them.
Number 5: Set Yourself Up for Success
Last but not least, in order to catch a financial mouse or a real one you have to set yourself up for success. That means putting the traps where they will work the best!
Mice like to hide in nice, dark places. Behind the stove or dishwasher and in the corners of pantries are some prime spots for mice to be looking for food.
Now, if I set traps in areas where mice don’t frequent, then they are useless. I’m not setting my self up for success. I need to put the traps in those corners of the kitchen where a mouse is already looking for food.
In finances, you have to know your weaknesses. For debt, you may have a debt weakness that is keeping you in debt. Even if you are actively able to save, there still may be holes in your finances.
Again, impulse shopping is a big one. If you can’t go to the video games section without spending money, then it is probably best not to go.
Even something as small as not grocery shopping when you are hungry will play a major part. Not only will you be more prone to buy groceries you don’t need, you’ll be more likely to go out to eat as well so you don’t have to wait until you are home. It’s a lose-lose situation.
Let’s Catch Some Mice!
These five steps will help you catch any financial rodents in your budget. Believe me, you want to catch them. They are a menace in physical form and in financial form.
If I had been plugging holes and setting financial traps sooner, we would have a lot more money in the bank than we do now. Now that we are catching the “mice” we are using the extra money to pay off debt and build our savings.
What sorts of “mice” do you need to catch in your finances?