Ask the Questions. Reap the Rewards.

UPS drivers almost never turn left. In fact, left hand turns account for less than 10% of all turns a UPS driver makes. The reason is fairly simple, although not necessarily obvious. Left hand turns are inefficient and dangerous and avoiding them saves the company millions of dollars in fuel and driver downtime.         

A study conducted by the National Highway Traffic Safety Association offers a glimpse into why: 36% of all auto accidents occur at intersections. And a staggering 480,000 of those last year involved drivers turning left. Add to that the fuel and time savings from not sitting idle in the middle of an intersection and you can see why UPS does what it does.         

Airlines are equally obsessed with efficiency and costs because the heavier the plane the more fuel it burns. So they routinely ask themselves, “How can we make our planes lighter and cut costs?”         

For Southwest Airlines one answer was reconfiguring its galleys along with replacing glass bottles with lighter cans. This seemingly small change resulted in a savings of over 148,000 gallons of fuel a year. Another answer was replacing the old and bulky paper flight manuals for pilots and crew with lighter electronic tablets. This saved another 576,000 gallons a year. When you have thousands of flights, every pound costs so every pound counts.          

Constantly looking for ways to improve and become more efficient, no matter how small, can yield huge results for individuals as well. Looking at your household budget as a business, with money coming in and money going out, can make you see things a lot differently.         

For as long as I remember I’ve approached my personal budget this way. Working in finance and dealing with corporate budgets and forecasts, the link between business and personal finances became quite obvious early on.And as I’ve said before, people tend to underestimate the importance of small changes over time, so much so that they fail to take action. Not surprisingly this same concept applies to saving money as well: Small amounts add up over time.         

This isn’t just lip service. This month alone we’ve cut personal expenses by close to $300/month. Direct TV was replaced with Hulu Live. Car insurance was consolidated to take advantage of additional discounts, and property taxes were disputed, resulting in a lower tax bill. In addition to this, additional revenue streams have been created which I’ll provide more detail on in a future post.            It all comes down to consistently asking the questions: How can we improve? Can we do things differently? Are there things we can cut and not miss? If you don’t first ask the question, you’ll never find the answer and you’ll be less likely to reap the rewards.   


Rick

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