WallStreetDropout

Here’s a tip: Fix the small things that are wrong with your life. While I mean this to apply to things like your house and your car, the message could also be applied to more personal things, like your job, your relationships, your health. The reason being, that if you fix small problems along the way, you won’t end up looking at a situation years later wondering “How did it get like this?”

You may have heard of the broken window theory popularized in the 1980s that suggested that vandalism can be minimized by fixing problems when they are small. (See the Wikipedia entry for more details, but basically what this theory says is that if a landlord tolerates a broken window, maybe they’ll tolerate some grafitti. If they tolerate some graffiti, maybe they’ll tolerate an occasional break-in, etc…)

You might also be wondering, what does this have to do with personal finance? I view it this way: If you take the time (and expense) to fix the small things wrong with your house and your car (things you have sunk a lot of money into), you will enhance the value of those assets, as well as your enjoyment of them.

Here’s one way to look at it: Would you rather drive a 5-year old car that looks brand new, or a 5-year old car that has some scratches, a dent, a window that won’t go up, and a tire that keeps losing air?? OK, nobody would say they’re prefer the car in worse condition, but some of you might think “Look at all the money I saved by not putting it into a 5-year old car that probably isn’t worth all that much!”

Now ask yourself this: Which one of those cars would you want to trade-in for a new one in the next year or so? If you were the owner of the beat-up car, you’ve probably been eyeing some of the shiny newer cars on your ride to work. Or maybe you’ve already been test-driving a few replacements.

Even with cost of regular maintenance and the occasional cosmetic fix, chances are you are saving a lot more money by keeping your car longer, than frequent upgrades or replacements. And with a car that looks good and runs well, you’ll feel better about driving it, too.

The WallStreetDropout thinks this applies equally to other assets. Your house, for example. Your better off fixing (or having fixed) that bit of rot in the trim by the garage door now, then you are waiting until it becomes a bigger and more expensive problem. Don’t wait until that small water stain on the ceiling become a big hole. When those repairs add-up, it can become overwhelming to try to manage. So, my advice is to fix the little problems as they creep up. If you can’t do it yourself, call a handyman or specialist (roofer, plumber, carpenter). It can be a hassle, but it’s worth it.

You don’t have to be as compulsive about it as the WallStreetDropout, but one thing I find helpful is to keep a list of repairs to be done to my house or car. In fact, I keep it these lists as Notes in Outlook, sync’d to my PDA. For examples, in my House Projects, I have 1) replace broken outside light fixture and 2) clean up the stains on the garage floor. Under “Car Service,” I had “Wiper blade inserts” but crossed it off, because I referred to the list before a recent service and had this done.

Of course, for an asset that depreciates in value, there will come a time when it no longer makes sense to fix, and you will have to determine that time for yourself. For example, I got rid of an 11 year-old Audi with 225,000 miles on it that looked and ran fine, because I had just gotten sick of it. And “new” features like an air bag were starting to look like appealing in newer cars. But I am sure that fixing the small things along the way with that Audi, contributed to that cars long life, as well as my ability to enjoy it for 11 years. While I had my car serviced at the dealer when it was new, I found a car repair shop that specialized in Audis. Finding specialists for most makes should be fairly easy to find in any metropolitan area.

And while this is a personal finance blog and not a personal development blog, I wouldn’t be surprised to hear how the “fix the small things” philosophy applies to other aspects in life, as well.