How many times have we second guessed ourselves when we are confronted with something we want to change and make a decision to do so only to give up because we fail to see the progress achieved by seemingly small steps?
Going for a walk in my local area the other day, I noticed that the once established path of a river had been changed drastically by the natural erosion of water finding a quicker way to progress down the hill. One drop of water spilling over the riverbank over time had slowly but surely created a new, quicker and more efficient path than the one already established . There was still evidence of the old but it was obvious that the job of getting water efficiently to the rest of the vegetation downstream after a big rain storm had been made far superior by the new.
If we take this act of nature as a lesson in the significance of small steps we will learn that progress is definitely achieved when we take the smallest of steps. I have recently been inspired by a couple who came to see me over a year ago now and it seemed like there was no hope. They had debts that were mounting, they couldn’t refinance to consolidate and it seemed that there was just not enough money coming into the household to fund the needs of the household.
This courageous couple took their first step of significance when they decided to change. They no longer wanted to see their debt increase rather they wanted to reduce their debt and so their second step of significance was to ask for outside help. A year later they have reduced their debt by $4,500 and have learned to live within their means and they are so much happier today because they are not lying awake at night worrying about debt or bills or putting food on the table.
So what does it take to push through when you can only manage to save $5 here and $2 there? How do you keep going with forging a new course for your family’s financial future when your debt seems to be reducing so very slowly?
Let me tell you what it takes…….It take focus and determination and keeping going with the seemingly small steps until one day you look back and you see you have actually changed the course you were on!! You are now leading your family into a more prosperous tomorrow.
So armed with determination let me give you the 5 steps to being able to turn your financial life around. To go from increasing your debt to reducing it and saving for the financial future that you want.
Step 1. Write down what you don’t like about your finances now and how you want your money world to look this time next year. Be realistic – thinking a fairy godmother is going to leap out and grant you millionaire status with a flick of her wand isn’t going to happen!
Step 2. Make a decision to change – to stop handing over that credit card or taking out another interest free or signing up for Afterpay when you cannot afford to have something you want. Decide that you are not going to go into further debt.
Step 3. Start living within your means – that means – work out what you need to put aside for bills every time you get paid. Put aside the money you need for your your rent or your mortgage, your loan repayments and your direct debits. All of the things that have to be paid – set that money aside and then choose to live on the rest. If that means having bread and jam for a few meals a week until you start to get ahead – so be it. Do whatever you have to do to stop going backwards.
Step 4. Decide that you are going to live on less than you earn. After putting aside all of the money you need for your bills and fixed expenses – before you use the rest to live off – put aside $5, $10, $20, $50 – whatever you can to start paying off debt or saving to build an emergency fund.
Step 5. Regularly check how you are going – how much have you reduced your debt by? How much do you have in savings? Is there any way you could save more or pay debt off quicker? Regularly evaluate if you are wasting money as you start to look at this area of spending and saving – you will start to notice areas where you could improve or you will start to find creative ways of increasing your income e.g. selling unused items or turning a talent of yours into a paid service to help others.
So there you have it – small steps – but I think you will agree with me that they are certainly not insignificant steps. Watch out for that little voice in your head telling you it is a waste of time – “what difference would $5 here or there really make?” That voice needs to be ignored because as you start to save $5 here, $2 there you will also start to see other ways to save and before you know it you are moving quicker and taking bigger steps.
I would love to hear how you go implementing these 5 steps – leave a comment in the comment box below or ask a question and I will endeavour to answer them.
Here’s to taking that first step!!!