This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and raising children at

Recently, I’ve gotten into indoor rock climbing. It’s a challenging activity, and frightening when you first begin. You need to really push the edges of your strength and flexibility. Once in awhile, if you happen to glance down and see how far off the ground you are, it can be terrifying.

Which is to say, it’s a lot like managing your personal finances.

What makes rock climbing a fun hobby instead of a dumb stunt is the safety gear. You climb with a rope and a safety harness, so if you “fall”, you’re caught in mid-air. In most cases, you don’t really fall at all. You just swing out from the rock when you lose your grip. The rope holds you up and you can pick up close to where you let go. Falling like this can be scary if it’s unexpected, but it’s not particularly dangerous.

To bring this metaphor back to your money, financial security is about creating financial “safety gear” to protect yourself. A harness and rope won’t keep you from financial collapse, but there are tools that will.

Your Emergency Fund
The tool that springs most immediately to mind, of course, is your emergency fund. That cash cushion acts like the crash pad climbers use when they’re “bouldering” — climbing without a rope. It’s the safety net that will catch you if you do fall, and hopefully cushion the blow of any financial tumble you take. While an ideal emergency fund comprises three to six months of living expenses, even people struggling to get out of debt should have a thousand dollars or more set aside in a savings account. This fund will protect you from the financial repercussions of flat tires and sudden illnesses.

Having a solid emergency fund is essential to absorb the shock of a financial fall. Your goal, though, is never to need it. An emergency fund isn’t your first line of defense — it’s the last one. It’s what breaks your fall at the bottom. Ideally, as in climbing, you’ll be able to avoid falling at all. To avoid the falls, you need other “safety gear”.

Financial “Safety Gear”
No amount of income will protect you from financial trouble if you don’t manage your money well. You can have a six-figure salary and still be sinking ever deeper into debt. To be truly well-off, you want to become balance-sheet affluent rather than income-statement affluent. That is, you want to have a solid net worth. To get that, you need good financial habits.

Even more than an emergency fund, it’s the good financial habits you develop and commit to that will protect you from financial falls. Think of these like your rope and harness: They’re the safety gear that stops you from falling, rather than the crash pad that cushions the blow when you do. Unlike an emergency fund, which protects you from hitting rock bottom, these strategies aim to catch you in mid-air, so if you slip you can pick up close to where you dropped off. They’re the tools you can rely on every day as you manage your money. Do them right, and they’ll always be there for you.

Your essential financial safety strategies include:

  • Spend less than you earn. This is the most basic tenet of personal finance. If you master it, you’re ahead of the game in everything. Without it, all the financial tricks in the book won’t protect you. You simply must spend less than you earn. Developing this simple habit doesn’t come easy to many of us. Like anything, you need to gradually build up your strength. Once you have a firm habit of spending less than you earn and saving the rest, you’ll be in a much better financial position. Even if you do nothing else. When you habitually spend less than you earn, you’re poised to absorb an unusual expense without touching your emergency fund. Even better, you’ll be able to consistently grow your savings.
  • Track your spending. Keeping track of every penny you spend and earn is one of the most powerful tools there is for taking charge of your spending habits. When you see where your money goes, you can act to reduce costs in big and small ways. Without that tracking, you often find yourself spending carelessly on things that don’t really further your financial goals. You can track your spending with a variety of financial software products. I use Mint these days, because it has a nice set of features and a good iPhone app. You can also use a simple Excel spreadsheet or even a pen and paper. Do what works for you. Just be sure to do it.
  • Develop a spending plan. A spending plan, a budget — call it what you will. Having some clearly articulated intention for how you’ll spend your money helps you avoid frittering it away on small luxuries when you want to be saving it up for something big. Your spending plan will also help you predict upcoming expenses, and put aside the money needed to pay annual bills and large purchases. A spending plan is like the other side of your spending records. While tracking your spending shows you where your money has gone, your spending plan shows you where your money will go. Both are essential to successfully living below your means and managing your money with intention.

Mind Over Money
Cultivating good financial practices isn’t easy as easy as buckling on a climbing harness. Developing these habits is hard work. As I mentioned before, it pushes at the edges of your strength, flexibility and endurance. I believe this is especially true if you’re getting out of debt.

If you’ve been in debt, you probably had spending habits that exceeded your income at some point. Even if that’s not the case, if it was a sudden catastrophe like a major illness or job loss that pushed you into debt, climbing out is hard. It takes endurance, and a willingness to keep going when it seems impossible. It also requires flexible thinking to cut expenses back to a minimum, and strength of will to keep up with your essential financial safety strategies.

Finding these qualities in yourself can be a challenge. That’s why, along with the good financial practices outlined above, it’s a smart to do something to cultivate strength of will, flexible thinking, and endurance in yourself. It doesn’t have to be about money. Like my rock climbing, or the yoga practice I’ve written so much about recently, these things aren’t directly connected to personal finance, but they do call on some of the same strengths. Because I’m doing these things, I have more strength, flexibility, and endurance when I sit down at my desk to do my money mojo for the week. That carries over into staying more on top of my finances, and more motivated about my goals. Finding an activity that can build these qualities in your life is a gift.

You don’t have to spend a lot of money to do this — or any money at all. Take up running, or sitting meditation, or writing morning pages. Even just keeping a brief journal where you jot a sentence or two each day can help develop discipline, flexibility, endurance and strength. Again, do what works for you. Just do something.

What do you do to stay motivated and to keep your financial “safety gear” intact?

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