Have you ever had a huge task to accomplish that you didn’t know how you could possibly ever complete it?
Several years ago, I was studying for a major test and my mentor, seeing that I was overwhelmed said, “Do you know how to eat an elephant?” I thought the question was strange, and I’d never heard this before, so I responded that I had no idea. His response: “One bite at a time.”
The lesson I learned from this has helped me in nearly everything that I’ve done since – when faced with a major decision, problem or situation – if I started feeling overwhelmed, I realized that I needed to take bite-sized steps towards the ultimate solution.
This is very helpful when dealing with getting out of debt. After you’ve gone through your budget, you’ve got your starter emergency fund in place and reviewed just exactly what debts you have to pay, it’s very easy to look at the grand total and feel your heart racing and for your inner monologue to start doubting your abilities. You need to tell yourself to quiet down – because this elephant is YOURS to tackle.
Here’s how to do it:
1) List out your debts from smallest balance to the largest balance
2) Determine your minimum payments for each debt
3) Pay the minimum payments on each one except for the smallest debt
4) Roll your payments over when you pay one debt off and add it to the next
If the minimum payment on your smallest debt is $25, I bet you can find another $5, $10, or $20 in your budget to pay it off faster. Most people can find at least a little bit in their budget – and when you’re starting to attack your debt, every penny does count!
Focus on your smallest debt and pay that off as quickly as possible. Nickel and Dime that payment if you need to. Watch that smallest debt shrink – apply any “extra” money in your budget to that debt until it’s gone.
When your smallest debt is gone – CELEBRATE!
Your first bite of the elephant is FINISHED!
*IMPORTANT* Don’t stop here! You need to move immediately to your second bite – this time it’s going to be a bigger bite!
Look at your next smallest debt, you’ve been paying minimums on it – now it’s time to step it up and rollover what you WERE paying to the prior debt to your payments on this debt.
So for example Debt #1: Had a minimum payment of $25, but to pay it off faster, you were paying $50 to it.
Debt #2 had a $50 minimum payment that you HAD been paying. You’re going to pay that $50 but ADD the $50 that was going to Debt #1 to it, making your payment to your next debt $100.
Right now, your DEBT is your ELEPHANT. Your task is to devour that debt – and as much as you’d love it gone in one sitting, the best way is to eat it one bite at a time. As you get rid of one debt, your next bite will get bigger – until one day, your elephant is gone!
Takeaway: If you’re debt is overwhelming, break it down into bite-sized pieces and attack it from there!
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