I was walking up the stairs of the condo in which we are staying and I noticed something strange on the floor. The stairs are sheltered, but not water-proof. On the landing of the second story, there is a small, two inch deep hole, right in the middle of the concrete floor. As I was looking down at the little hole, a small drop of water hit the back of my neck. I looked up and I saw the ‘reason’ for the hole in the floor. Over the years, water has been dripping, drop by drop, from the third story landing onto the second story landing. Slowly, but surely, the water has been eating away at the concrete below. Eventually, with enough time, the water will create a hole which goes all the way through the second floor landing. After that, the water will begin to do its work on the first floor landing. Amazing.
Debt reduction requires the same patient, day after day, commitment. Drip by drip, drop by drop, payment by payment, we work ourselves out of debt, one account at a time. A consistent flow of water, over time, can accomplish amazing things. (Think, Grand Canyon!) Waiting for a “flood” of money? Stop. Focus on creating a consistent flow of money. Think of each dollar that you send to your creditors as a single drop, working with hundreds or thousands of other drops, to eat away at your debt.
I like to use my bank’s online bill-pay system to manage the “flow” of my money. By making multiple monthly payments to a single account, I rapidly reduced my debt. But, before you can send extra money to your creditors, you need to have some extra money to send. Instead of focusing on how to save $1000 or even $100 dollars, think about ways to save $10, $5, or even $1.
$1 per day = $365 per year
$5 per day = $1825 per year
$10 per day = $3650 per year
$25 per day = $9125 per year
If the average American has $8000 in credit card debt (a figure that I doubt, but I’ll use it for the sake of making a point), she could be out of debt in less than a year if she managed to reduce spending by only $25 per day. (If you are looking for ways to save money, read this popular post: Your Very, Very Best Money Saving Tips!)
Now, take a few seconds to consider your life. Are you waisting money, drip by drip, or are you utilizing money, drip by drip? Remember, every dollar counts! (While this post is primarily about debt reduction, the same ideas apply to saving money. Dollar upon dollar, drop after drop, I am slowly, but surely, building up my retirement, college, and investment savings.)