If your bars are set at the correct height, you’ll be more comfortable, stable and in control.
There are a couple of ways of changing the height of your bars. Easiest is to swap your stem out for another model. There are countless options for length and angle so you should be able to find the perfect set-up. However, for minor height adjustments, a cheaper option is to use the stack of washers that sit between your stem and your headset. If you take off your stem, and a couple of the washers, and refit the stem, it’ll sit at a lower position. The washers you’ve removed will then have to be repositioned above the stem, as they’re used to push the stem down the steerer tube when you tighten the top cap. It’s a quick, free upgrade! You’ll end up with a neat stack of washers sitting above your stem. Ignore them until you’re sure you’re happy with the new position, then use the instructions to cut off the excess steerer tube. Don’t do this until you’re sure you won’t want to raise the stem back up again – it’s relatively easy to make the steerer tube shorter, but you can’t make it longer again! You’ll need to readjust the headset bearing again once you’ve reassembled everything.
Step 1: Remove the top cap. You’ll need to undo the top cap bolt all the way and wiggle the cap off. This reveals that star-fanged nut inside the steerer tube. Lift off any washers that were sitting between the top cap and the stem. Check the condition of the top cap. If it’s cracked or the recess where the bolt head sits is distorted, replace it.
Step 2: Loosen the stem bolts so that the stem moves freely on the steerer tube. Pull the stem up and off – you may need to twist it a little to help it on its way. Tape the entire handlebar assembly to the top tube so that hoses and cables don’t get kinked under the weight of the bars.
Step 3: If you’ve hung the bike in a workstand, keep a hand on the forks so that they don’t slide out of the headset. Add or remove washers from the stack under the stem. If you’re adding washers, you can only add washers that came off above the stem.
Step 4: Replace the stem, then any leftover washers – everything that came off the steerer tube should go back on. The washers are all necessary because as you tighten the top cap, they push down onto the stem and then the bearings, adjusting the headset.
Step 5: Check the height of the washer stack above the top of the steerer tube. There should be a gap of 2–3mm (around 1⁄8 inch). If possible, this should be a single washer, not a stack of thinner ones as individual washers have a tendency to get caught and stop you adjusting the headset properly. Add or remove washers from the top of the stack to achieve the desired gap.
Step 6: Replace the top cap, and go to ’Aheadset: adjusting bearings. Once you’re satisfied with the adjustment, ensure the stem bolts are securely tightened.
Source : BIKE MAINTENANCE TIPS, TRICKS & TECHNIQUES
See also bike maintenance tips, tricks and techniques “Aheadsets: adjusting bearings”