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New Year Snowball

We all have a limited amount of energy, discipline, self-control, stick-to-itness.  Whatever term you use, it is hard to come by and even harder to replenish.  The trick is to focus what little we have and not waste it.  Our discipline is particularly strained every new year when we inevitably pile on the resolutions.


Dave Ramsey, the personal finance guru, has come up with a trick to harness this commodity.  He advocates The Debt Snowball – to pay off debts, no matter how large.  Here is how it works:

  1. Write down all your debts in order of least amount owed to the greatest amount owed.
  2. Add up the minimum payment due on each debt and figure out how much additional money you can commit to pay the debt down.  It may be as little as $20 a month.
  3. Each month, pay the additional $20 toward the smallest bill (let’s say it is a $200 medical bill with a minimum payment of $30).  Therefore you would pay $50 toward the medical bill and pay the minimum payment on all the others.  
  4. When the medical bill has been paid off, you take the $50 you were paying towards it and apply it towards the next smallest bill.  Now you are decreasing your debt by $50 a month, without any additional effort.


This is a wonderful plan for a few reasons.  First the effort required is minimal.  $20 a month is easy – the equivalent of skipping one fastfood meal a month.  Second, the rewards are fast.  While it may take you several years to pay off all of your debt, it could be only a month or two before your first bill is paid off.  And as each bill is paid off, more and more money gets applied to the next bill and it is paid off quicker than the last – thus the Snowball.  In essence, the system creates its own energy.  Third, it creates a great sense of accomplishment as your bills fall off.


What if we took this system and applied it to our New Year resolutions?  What small effort could accumulate to massive change?  The error we make is attempting to change, give-up, start anew, immediately.  This is the equivalent of attempting to pay off our debt in one month!  Reality will kick in about 15 minutes later and hopes will be dashed.


Instead, write down your goals in order of the ones that require the least effort/time to the ones that require the greatest effort/time.  For example you may start with: take a daily multivitamin.  This takes 15 seconds and very little discipline.  However, once you do this for a few weeks and it becomes a habit, you can apply that effort to the next thing on your list.  Maybe, drinking more water which takes discipline throughout the day.  Soon another habit is created.  Habits are different than money though as it takes effort to create a habit, but once it is established, it takes no effort to maintain.  Thus you have all your energy to attack your next goal.  And just like that, you create your own Snowball.  
Try this and you will be shocked how one habit can drastically improve your life and make each step more inspiring than the last.

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