Most fruit bearing trees have some branches that are low enough that you can reach them from the ground. From there you can pick the “low hanging fruit” and fill your basket with relative ease. This fruit may not be the ripest or best tasting on the tree, but it is the easiest to harvest and requires the least amount of effort.
This phrase if often used in the business world in a similar manner – completing easily achievable targets or goals which do not require a lot of effort. The gains may not be the biggest or most valuable possible gains, but that does not mean they are not worthwhile. On the contrary, they are often very valuable because they show measurable progress at an early stage. And that progress can be enough to create excitement and keep the project rolling.
This concept of low hanging fruit can easily be applied to your personal finances.
Pick the Low Hanging Fruit – Go for the Quick Wins
Most people have room to improve their financial situation. Here are some quick wins you may be able to take advantage of:
Reduce expenses. One of the most common ways people get into financial trouble is to commit too much money to payments each month. Examine your regular monthly expenses and look for places you can cut back.
- Low hanging fruit: Brown bag it instead of eating out, drop premium channels or ditch cable entirely, cut magazine or other subscriptions like Netflix or Blockbuster, request new insurance quotes, and other ways to save money.
Increase income. There are times when cutting expenses just isn’t enough and you need to raise some cash in order to make ends meet. If you need quick cash you have several good options.
- Low hanging fruit: Have a garage sale, sell items on Craigslist or Ebay, take a part time job, or work to create alternative income streams.
Simplify your finances. Go through your recent financial statements and make a list of each account you have. If you are like me, you probably have multiple bank accounts, retirement accounts, credit cards, and other financial accounts. Determine which of these accounts are necessary, and decide which can be consolidated. Just be careful when canceling credit cards because it can have a negative affect on your credit score.
- Low hanging fruit: Consolidate bank accounts, retirement accounts, etc. based on personal needs.
Capital One 360 is a great online bank that gives users the option to link multiple banks and create sub-accounts to more easily track savings and other financial accounts. You can also link a ShareBuilder account.
Reduce your debt. Unless you have a stash of cash in the bank, it can be difficult to reduce debt quickly. But it can be easy to set up a system to reduce your debt more quickly. Here is a way to reduce the amount of interest you pay and a repayment method that gives you the quick wins you need to maintain the motivation to become debt free.
you can reduce your interest rates on credit card debt by opening a 0% balance transfer credit card to take advantage of no interest on your credit card balance (more info on how to do a 0% balance transfer). Then begin using the debt snowball method of debt repayment, in which you make the minimum payment on all but one bill, then use extra cash to make additional payments on the smallest balance owed to eliminate it more quickly. If you use these two methods in conjunction, you should modify your payments to direct your extra cash to the highest interest rate so you can avoid paying interest on the credit cards with 0% interest. Each time you pay off a bill, direct the amount you were paying toward the next item on your list and continue snowballing your efforts. In time, your monthly payments will increase and your debt will be eliminated more quickly.
- Low hanging fruit: Pay more than the minimum balance, sign up for a 0% Balance Transfer Credit Card, start using the debt snowball method of debt repayment.
Quick wins are valuable
The quick wins may not be the biggest wins, but they often have just as much value because they show measurable progress and keep you motivated. Pick the low hanging fruit first – it’s the easiest to grab and will give you the highest return for the amount of work you put in.
What other quick wins in the personal finance field can you recommend?