Personal Finance Challenge #19: Keep it Simple

If I were to have a K.I.S.S. method it wouldn’t read “Keep It Simple, Stupid!”, it would read “Keep It Simple, Smarty!”

Because we are not really stupid in the true sense of the word. Our actions may be stupid, but we are not stupid ourselves.

We are smart. TOO smart! We are so smart sometimes we often outwit ourselves.

We get on a really good game plan, we see results happening, and then we think it is a smart idea to switch things up in the middle of it. Then things start to fall apart and we wonder what happened.

Guess what? We were too smart for our own good. We tried to out think the system and got off track. Not that our ideas didn’t have any merit, but that they didn’t allow us to reach the desired goal.

Simple plans may yield simple results but that may be all we need to succeed.

Take debt for instance.

It is often one of the main personal finance challenges most people have. They have too much debt, and can never seem to pay it off.

It usually isn’t the case that they are not trying hard enough. Or that they are not smart enough to figure it out. They are usually failing because they haven’t stuck to a clear plan of action for the long term.

It may be boring, but simple plans usually do yield the best results.

How to Get Rid Of Debt?

1. Create extra money in your budget (increase income, decrease expenses, or both.)
2. Put that extra money toward your debt.
3. Calculate how long it will take to pay off your debt at this rate (increase or decrease rate as desired by changing your budget.)
4. Don’t take on more debt!

It is that simple, but hard to follow in practice. You are 100% guaranteed to pay off your debt if you follow this plan in the time frame it suggests.

Yet people like to increase the complexity of the equation…

They really need to buy this or that thing using debt (adds complexity).

They don’t want to decrease their expenses (adds complexity).

They either don’t or are unable to increase their income (adds complexity).

They want to use any extra income they have for other things (adds complexity).

They don’t want to be paying off debt for that long, but they aren’t willing to increase the rate at which they pay it off (adds complexity).

They take on even more debt (REALLY adds complexity).

Ahhhh, the best laid plans of mice and men…

But I digress… Keep it simple folks. Follow a simple plan and get results. Don’t let anyone tell you otherwise. Try not to sabotage your own efforts. Keep it simple. Let the magic work.

This is our 19th challenge in The Personal Finance Challenge Series…

Originally posted 2011-10-04 01:08:05. Republished by Blog Post Promoter