Drip, Drip, Drip Your Way Out Of Debt
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.)
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Great post. Nobody really thinks of it that way. The way I currently look at it is: I try to reduce my spending per pay-period. Since I get paid twice a month, it’s a little easier, I suppose. Some day’s I don’t spend any money, while other days I buy stuff to last me the week or something.
Your water drips UP?
But a good article regardless.
Details, Todd… The Devil is ALWAYS in the details..
NCN
[...] it feels like something big is the only thing that can fix the situation. The truth is that the little, purposeful improvements are the real fix. Even though it is not easy to change a lifestyle, the joy it gives you (and [...]
A good reminder that it takes perseverance to achieve financial goals. Very rarely are
there “quick fixes”
Great article…getting out of debt requires patience and maturity and focus….it also requires one to not sign up for any MORE debt. DUH!
Becoming Debt Free requires patience, maturity, and focus. It also requires one to NOT sign up for anymore debt……DUH!
Good analogy. Slow and steady wins the race is true in just about every situation. This is a Post of the Day
$1000 is a (bad word removed by editor) of a lot more money than a $1000. And how is this dripping up the stairs? Is there an editor in the house?
[...] Needed. Thanks, Claudia! Also, The Consumerist linked to my article about how to “Drip, Drip, Drip Your Way Out Of Debt.” The links for The Consumerist article were compiled by Free Money [...]
[...] Down Debt, Cutting Expenses Well — it can fell insurmountable, that’s for sure. But a recent post at No Credit Needed provides an alternative view of how the little things in debt … Debt reduction requires the same patient, day after day, commitment. Drip by drip, drop by drop, [...]
I really liked the post. It is an excellent story examplifying of the theory of kaizen. That by continuosly taking small steps large seemingly unobtainable goals can be achieved.
great article…. except:
Debt reduction requires the same _patient_
…should be _patience_.
It may seem nitpicky and critical, but a great article deserves to have a lasting impression on the content, and not a silly typo. just my 2 cents.
Linked to you from David on Finance.
Great article! Thanks for the reminder that the road to Financial Freedom isn’t a microwave — it’s a crock pot.
[...] reading NoCreditNeeded’s article titled “Drip, Drip, Drip Your Way Out of Debt“, I got to wondering “How much interest did we save by paying off our Malibu almost 4 [...]
Actually, acidspit, the word “patient” is correct as written. It is an adjective describing the type of commitment. Now, one could argue that there should not be a comma after “day after day” (I think I would hyphenate that phrase to day-after-day for clarity), and one could certainly say that after water falls from the second floor landing to the first floor landing, it won’t reach the fourth floor landing, and that while one can easily “waist” calories, it’s hard to imagine “waisting” money. (Oh, scratch that. I just had an icky visual of a really tacky belt made out of diamond-encrusted banknotes. That would be a waist of money.)
Anyway, while “fourth” and “waisting” are typos, “patient” is not.
Nice article, NCN!
[...] A lot of people will tell you the virtues of keeping a spare change jar. You don’t generally miss the few coins rattling around, but a little bit adds up over time and you’ll find you have a few hundred dollars in your little change jar. No Credit Needed made a similar post about getting out of debt a little bit at a time. [...]
Great information. Thanks
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