I do love finding a good metaphor, and earlier this week I found myself literally tripping over one on my front porch—tripping, slipping, and stumbling over it, several times a day. It’s a sheet of ice caused by packed snow that had melted and re-froze. I was out of town when the snow came and nobody was around to shovel the snow off the porch. There is now an immovable impediment on my porch which, had it been addressed early, would have been far easier to remove. I can’t help but see this as a perfect metaphor for how we live our lives.

All over town I still see snow piled up on the north side of buildings, covering driveways and sidewalks and porches. Oftentimes, the same street will have houses alternating between shoveled walkways and un-shoveled walkways. Clearly some people take the ‘shovel early’ approach to life while others take the ‘shovel later, or wait for it to melt, or just deal with the consequences later’ approach.

I, of course, take the ‘shovel early’ approach and encourage others to do the same. Time has a way of compounding small problems into much more difficult, or even impossible, problems. Instead of moving a couple inches of snow early, you’ll end up chiseling away solid ice later. If you leave a bill unpaid now, you’ll end up with a collection, excess fines, and damaged credit later.

This isn’t limited to addressing current problems, either; it applies equally to structuring your life and finances now to make things easier down the road. It means, for example, taking out a small loan or credit card early in life to start establishing a credit history. It means paying your bills on time to avoid collections. It means saving money even if you don’t have a particular savings goal in mind, such as purchasing a house or paying for college tuition. Contrary to popular belief, it is far more difficult to secure a loan for a borrower who has no credit than terrible credit. A borrower with a 580 credit score is more likely to get a loan than someone with no credit score or no credit history, simply because the lender can’t be sure whether than borrower will behave like an 800-FICO borrower or a 400-FICO borrower. The 580-FICO borrower is at least a known quantity. It’s remarkable how many late-20s to early-30s borrowers I see who have no established credit history. Those who began building their credit history early, ideally as soon as they turn 18, are in a much better position than those who have procrastinated.

As the snow starts to melt—or, to leave the metaphor for the real world for a moment, as the economy starts to improve—we’ll all have an opportunity to start over. We should use better weather as an opportunity to correct our behavior and prepare for the next winter. As the economy continues to improve and the housing market continues to recover, more opportunities will present themselves to more people. Those best positioned to take advantage of them are those who started preparing their finances early.

3-7-15 The Snow and Shovel Approach to Life

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