On December 31st Jennie wrote about sticking with resolutions. Now it's my turn to talk about resolutions. Yes, we all make them and we all break them. Jennie mentioned the word "realistic" in her blog. I agree, the reason most resolutions are broken is that they start out way too ambitious.
I always remember what my late father said, "Max, eat the elephant one bite at a time."
Wise words. Too often people set goals that are totally out of reach, such as I want to pay off my $15,000 credit card balance at the end of this month. That's fine if you make $300,000 a year and have your house paid for, in which case you probably wouldn't be carrying a $15,000 credit card balance.
So, let's say you have a $15,000 balance on your credit card and it's charging you 15% interest. You would pay that card off in 48 months (four years) if you made a payment of $417.46 per month. Now, I know that's a little hefty, but based on lease payments for cars, that's slightly over the average car payment. Perhaps you want to take smaller bites; that's fine, just know it will take you longer. It will take you five years, or 60 months to pay off that balance if you make monthly payments of $356.85. That will be $60 less per month, but it takes a year longer.
The problem is that most people make only the minimum payments. One of the biggest traps of a credit card is that credit card holders think, "Wow...that's all I owe is the $34.52 payment." Yeah, keep thinking that and you'll be in debt all your life because you will never touch the principal. The average credit card in America has a $10,000 balance. Do you know that it will take over 33 years to pay off that $10,000 balance if you pay only the minimum.
Yes, I do believe in eating the elephant one bite at a time; however, a $34.52 payment on a $15,000 balance is way too small a bite. We need to take a larger bite, but not too much that you can't handle. Your bite should not be to the detriment of your other obligations.