How to improve your liquidity

Ensuring that we are always liquid is critical. A company could go bust
overnight due to liquidity problem. What is liquidity? Liquidity simply means
to be able to pay when we have to pay. Likewise as an individual, managing our
liquidity is critical as well. We need to basically set up an emergency fund of
our monthly expenses between 3 to 6 months to enable us to sustain should we
encounter financial crisis like this. To ensure that we are always liquid, we
need to monitor our cashflow. If we have been tracking our monthly or better
still daily expenses then we could easily indentify the expenses that we could
cut down.

We have been conditioned all this while to drive even to the nearest
destination. Nowadays, bicycle has been my first choice mode of transport,
followed by motorbike, then car and public transport. Not to forget we could
even walk, okay!

Bike commuting is one of the ways to improve our cashflow. I am using this
drinking container to put aside all the direct or indirect expenses that I
could save whenever I am cycling my bike instead of using car/motorbike..




What are the direct and direct expenses that you could save?

Cost per kilometre (km)
How much does it cost you for every km travel if you are using your car or
motorbike? I prefer this method since it also encourage me to track the
distance that I have travelled so far. For instance if my cost per km is 15sen,
then if I cycled for 50km to work (to and fro), then I would save RM7.50
(RM0.15 x 50km) that particular day. This is only applicable to activities that
instead of using car/motorbike, you cycled. Sports activities are not counted.


Parking
How much would I have to pay for parking? Let say RM2.50 per entry. Then that
RM2.50 will be put into the container.

Toll
Do I have to pay toll for my journey? For instance, if I am using the NPE
highway, I would have to incur RM4.80 (to and fro).

Cigarette
Maybe as a result of this bike commuting, you would quit smoking. Let say RM10
per day. Read the story of Riezal who has finally quit smoking

Gymnasium fees
Since you have been cycling regularly, you might stop going to the gym as well.
Let say another RM50 per month saved.



I know that it's a bit tedious, but unless we know where our money goes to, we
could never be able to improve our cashflow. Well, it's all about habit
forming.


Commuting bike doesn't need to be expenseive. I acquired these 2 used bikes for
about RM1,000. So far no problem and it has travelled for more than 2,000 km.


Fixie (Single Speed Fixed Gear)



Giant Chromoly 21 Speed


The most common operating expenditures would be:

Flat tires
Replacing tubes would be very expensive. A tube would cost between RM10 to RM16
depending on the bike shop. A cheapest solution would be to patch the tube. I
bought a box of patch for RM10 only. It has 48 patches incusive of a
glue. So per patch it only cost you about 21sen (RM10/48).



Replacing tires
You don't need to buy high performance tires for commuting purposes. My tires
only cost me RM25 each. Honestly I didn't know how often do I need to replace
it yet. Let say for 3 months (60 working days), then the cost would be RM0.83
per day (RM50/60 days)

Parts wear and tear
I don't upgrade. Only replaced it when required. Honestly, I don't have any
problem commuting with my fixed gear bike. So the 21speed chromoly MTB is far
more than adequate. So far for the past 2 years, the only parts that I replaced
was my MTB's crank arm.



The whole idea is to minimised your operating expenses. It's like setting up your bicycling account. At the end of the day, you would be amazed that how much you could have saved. So cycle more in life (CMILe)

Read Dino's article on Spend wisely