At one time, General Motors was the largest auto manufacturer in the world and peaked at 29% of the world market. At some point well into the years of environmental awareness and the need to make cars more fuel-efficient, GM fell down on the job, was surpassed by Toyota and saw its share drop far below its peak .  In the 1990’s, desperate to regain its share, GM initiated a program to restore its portion of the market to its high point of 29%.   Throughout the company the number 29 became a rallying point and target whose ultimate purpose was to restore GM to its former glory and market share.  Everywhere one looked throughout GM corporate offices and plants, one could find placards, buttons, stickers with the number 29 well-featured. The number became a mantra and obsession for GM leaders, determined to reach at any cost the portion of the world market share which had once been theirs.

But GM went about reaching the goal in the wrong way. Instead of building a long range plan, the company became addicted to short term tactics and gimmicks. It offered customers large discounts and interest-free loans so that sales would increase and a larger share of the market would be reached. GM allowed its energy to be diverted from strategies and programs which would have made a difference in the much longer term. It did not invest in designing a better car, it did not streamline its production line and it did not sell off unprofitable divisions.  As a result, the travails of GM still occupy the business pages of the news.  And this tale is not unique.  The business world is replete with examples of companies whose race to profits involved either shallow and hasty planning (the “Ford Pinto”) or outright criminality (Enron).

Is home budget management any different? Not really.  Reaching a worthy goal in home finance requires tenacity, patience and long term vision. Suppose you want to liquidate your overdraft. To do it quickly would in most cases be the wrong way to go. You could dip into your emergency fund, crash your savings, delay necessary repairs to your home and car or drastically change your spending habits in a way that would be unsustainable and would eventually get you back into the very hole you are trying to escape. Quick, snappy, short and sweet – these are not formulas for long term budgetary stability.

A worthy plan to overcome an overdraft debt requires building a budget which will be sustainable. It demands lifestyle changes which are reasonable and will not make you so miserable that the whole budget process is doomed to failure. It requires responsible implementation and regular weekly review. Under this longer term plan, the payments on the overdraft will be smaller, but your steps will be surer and long-lasting.

Climbing the overdraft tree can be done with giant leaps from branch to branch, but the danger of falling in a heap to the ground is great. You are better off with small, sure-footed steps in the management of your budget in particular, and finances in general.