Debt $ense

My boss has a saying about big tasks: Eat the elephant one bite at a time. In other words, break big tasks down into little ones. It sounds a little goofy, but I’ve found it works.
It’s a good way to handle saving for big items. Just put a little money aside each week and you’ll be able to pay cash, not add to your plastic. Now that I’m running again, I know I’ll need to replace my shoes in a few months, so I took $10 from this week’s paycheck and put it in an envelope. If I do that each paycheck, I’ll be able to save about half the money from my weekly budget and only need to take half from my “pinch-point” savings account. (That’s the one that handles irregular expenses like car insurance.)
It’s also a good way to think about paying down debt. If I think “I have to pay $8,500 to my credit card company,” it seems overwhelming. But when I break it down and say “I’ll pay $137 each week,” it suddenly becomes much less so. It also makes me more vigilant in searching for places I can take another “bite” out of the debt because I know smaller amounts will make a difference. $4 here and $10 there has gotten me $77 in the last week for an extra payment. An extra morsel like that each month will make for a nice debt-free dessert this time next year.

Two conversations with co-workers this week have me musing on what I call selective indulgence.
Basically, it means building in a little splurge to make the tight budget required to pay down debt palatable. And when I say little, I mean little. For my co-worker buried under student loan debt, it’s coffee from the coffee shop instead of his kitchen once a week. One friend vowed that once she finished grad school, she would only drink real diet Coke, even if it meant cutting expenses other places. For me, it’s my collection of Republic of Tea flavors instead of generic black or green tea.
Now, while those all revolve around caffeine, your splurge doesn’t have to. It can be almost anything inexpensive that makes you happy. The key, it seems, is choosing something that lets you say, “Hey, I can handle brown-bagging it while everybody else goes to the Mexican place for lunch.” It seems that by giving yourself permission to not scrimp and save in one area, it makes the other sacrifices easier to bear, which means you’re less likely to splurge on something that really will bust the budget. And that means a lot more money saved in the long run.