Ever heard the saying, “How do you eat an elephant?” The answer: “One bite at a time.” While we’re not advocating for the consumption of elephants (they’re much better left in the wild), this metaphor offers a brilliant approach to tackling the herculean task of managing your finances.
Whether you’re buried under a mountain of debt, trying to save for a big purchase, or simply aiming to get your spending under control, the key is to break it down into manageable bites. Want to learn how to do this? Let’s find out below:
What does it mean to eat an elephant in your finances?
“There is only one way to eat an elephant: a bite at a time.” This quote by Desmond Tutu does not literally mean you need to eat an elephant, it tells you how to tackle big challenges. The idea is simple: when you’re faced with something massive and overwhelming, don’t try to do it all at once. Instead, break it down and tackle it bit by bit.
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Think of it like this: if you had to eat an elephant (purely hypothetically, of course), you couldn’t possibly do it in one go. You’d have to take it one small bite at a time. It’s the same analogy that works in your financial goals. Whether it’s a project that seems impossible or a personal ambition that feels out of reach, the key is to break it into smaller, manageable chunks. This approach turns seemingly impossible tasks into doable ones.
Before you can start using this analogy in your finances, you need to do the following:
- Identify your debts: List out all your debts, including credit cards, loans, mortgages, and any other liabilities. Knowing the total amount owed and the interest rates will help you prioritise.
- Track your expenses: Use apps or a simple spreadsheet to track every penny you spend for at least a month. Categorise these expenses into essentials (rent, groceries, utilities) and non-essentials (eating out, entertainment).
- Assess your income: Make sure you have a clear picture of all your income sources. This includes your salary, freelance work, investment returns, or any other income streams.
Now let’s go into how you can eat the elephant in your finances.
10 Ways to eat an elephant in your finances
1. Identify your elephant: setting clear financial goals
Before you can start munching on your financial elephant, you need to know what your goal is. Do you want to own a home? clear your debt? Or perhaps trying to save for retirement? Identifying your financial goals is the crucial first step in this process.
Start by asking yourself:
What do I want to achieve financially in the short term (1-3 years)?
What are my medium-term financial goals (3-10 years)?
What do I envision for my long-term financial future (10+ years)?
Write these goals down, be specific, and make them measurable. Instead of saying, “I want to save money,” try “I want to save £10,000 for a down payment on a house in the next two years.” This clarity will help you visualize your elephant and prepare for the feast ahead.
2. Slice it up: breaking down your financial goals
Now that you’ve identified your elephant, it’s time to carve it up into digestible pieces. This step is all about breaking your big financial goals into smaller, more manageable objectives.
Let’s say your goal is to pay off £50,000 in student loans. That sounds pretty intimidating from afar but what if we break it down like this:
Year 1 goal: Pay off £10,000
Monthly goal: £833.33
Weekly goal: £192.31
Daily goal: £27.40
Suddenly, that enormous £50,000 debt looks a lot less scary when you’re focusing on setting aside £27.40 a day. This approach works for any financial goal, whether it’s saving for retirement, building an emergency fund, or starting a business.
3. Grab your utensils: assembling your financial toolkit
You wouldn’t try to eat an elephant with just your bare hands, would you? (If you would, we admire your moxie, but suggest a different approach for finances.) To tackle your financial goals effectively, you need the right tools.
Your financial toolkit might include:
- A personal finance management app or spreadsheet to track income and expenses
- Automatic savings transfers to make consistent progress
- A debt repayment strategy (like the snowball or avalanche method)
- Investment accounts appropriate for your goals and risk tolerance
- Financial education resources to improve your money management skills
Remember, different goals might require different tools. Just as you’d use a different knife to cut through tough hide versus tender meat, you’ll need various financial instruments for different objectives.
4. Take the first bite: getting started and building momentum
The hardest part of eating an elephant (or achieving any big goal) is often taking that first bite. It’s easy to feel overwhelmed and put things off. But remember, even the longest journey begins with a single step.
To build momentum:
Start small: If saving £833 a month seems impossible, start with £100 and gradually increase.
Celebrate small wins: Did you stick to your budget this week? That’s worth celebrating!
Visualize progress: Use charts or visual aids to see how far you’ve come.
Share your goals: Tell friends or family about your plans for accountability and support.
5. Develop a taste for it: creating positive financial habits
As you continue your financial feast, you’ll want to develop habits that make the process easier and more enjoyable. Think of it as acquiring a taste for financial responsibility.
Some habits to cultivate:
- Regular financial check-ins: Review your progress weekly or monthly.
- Educate yourself: Read financial books, listen to money podcasts, or take online courses.
- Practice mindful spending: Before making purchases, ask if they align with your goals.
- Automate good behaviours: Set up automatic transfers to savings or investments.
- Find free or low-cost alternatives for entertainment and hobbies.
Remember, habits take time to form. Be patient with yourself and focus on consistency rather than perfection.
6. Pace yourself: Balancing short-term and long-term goals
Eating an entire elephant in one sitting isn’t just impossible; it’s also not very enjoyable. The same goes for your finances. While it’s important to make progress on your big goals, you also need to balance them with shorter-term objectives and life enjoyment.
Consider:
- Setting aside some “fun money” each month for immediate gratification.
- Balancing debt repayment with saving for the future.
- Taking care of your physical and mental health alongside financial health.
- Allowing for some flexibility in your plan for unexpected life events.
This balanced approach will help you stay motivated and avoid financial burnout.
7. Find your herd: seeking support and accountability
Elephants are social creatures, and so are humans. Don’t try to tackle your financial goals in isolation. Find your financial herd – people who can support, encourage, and hold you accountable.
This might include:
- A financial advisor or coach for professional guidance.
- A money buddy – a friend with similar goals to check in with regularly.
- Online communities or local meetups focused on personal finance.
- Your partner or family members, if you’re working towards shared goals.
Remember, there’s no shame in asking for help or advice. Even financial experts consult with others and continue learning.
8. Watch for indigestion: identifying and overcoming obstacles
As you chow down on your financial elephant, you’re bound to hit some tough spots. Maybe an unexpected expense throws off your budget or a market downturn affects your investments. These financial “indigestion” moments are normal, but it’s important to address them promptly.
Some common obstacles and solutions:
- Unexpected expenses: Build an emergency fund to cushion these blows.
- Loss of motivation: Revisit your goals and remind yourself why they matter.
- Lifestyle inflation: Regularly reassess your needs versus wants.
- Market volatility: Stick to your long-term plan and avoid emotional decisions.
- Debt fatigue: Try different debt repayment strategies to stay engaged.
9. Savor the flavour: celebrating milestones along the way
Eating an elephant is a long process, and so is achieving significant financial goals. It’s crucial to acknowledge and celebrate your progress along the way. This not only keeps you motivated but also helps you appreciate the journey.
Ideas for celebrating milestones:
- Treat yourself to a small, budget-friendly reward.
- Share your success with your support network.
- Reflect on how far you’ve come and what you’ve learned.
- Set new, slightly more ambitious mini-goals.
- Do something kind for others, like volunteering or making a small donation.
Remember, the joy is in the journey, not just the destination.
10. Develop an elephant-sized appetite: expanding your financial goals
As you make progress on your current financial elephant, you might find your appetite growing. That’s great! Use this momentum to set even bigger goals or tackle new areas of your finances.
Consider:
- Increasing your savings rate as your income grows.
- Exploring new investment opportunities.
- Learning about more complex financial strategies.
- Setting goals in other areas of life that your improved finances can support.
Thinking about how you can use your financial knowledge to help others.
Organize your finances with Know Your Dosh
Eating an elephant, or tackling your finances, might seem overwhelming, but with a strategic approach, it becomes manageable. By breaking it down into smaller, actionable steps, setting realistic goals, and staying committed to your plan, you can take control of your finances and pave the way for a more secure and prosperous future. Remember, the journey of a thousand miles begins with a single step, or in this case, a single bite.
At Know Your Dosh, we’re here to help you every step of the way. Start your journey towards financial wellness today by using our platform to organise your finances and achieve your goals. Sign up here.