In my last post, I talked about motivation and money. Motivation is a huge yet under-discussed concept in personal finance, I think. While big wins may be the quickest way to wealth, that doesn't mean you'll reach your goals overnight. Even if you have become wealthy, you still need motivation to manage your money and prioritize your spending. After all, if you want to stay wealthy, then you can have anything you want but not everything you want. And if (like most of us) you're not wealthy yet, you may have to be even more ruthless in your prioritization.
I've been chronicling my debt payoff journey here on GRS for two years now. (Whoa!) In that time, I've learned quite a bit — not just about personal finance, but about myself. And as I pointed out in my last post, self-knowledge is an important component of motivation. So here's a rundown of some motivations that I've discovered work especially well for me.
I'm motivated by balance
I've written before about work-life balance. It's something that I place a high value on and, as a result, I'm willing to make compromises to achieve it. One of those compromises is taking somewhat longer to pay off my debt. This compromise manifests itself in a couple of ways. The first is time. While I do have a full-time job and a not-insignificant side gig, I make sure that I leave myself time to pursue hobbies. I like to cook — yesterday I made fresh salsa, chickpea “tuna” sandwich filling, and two loaves of zucchini bread. I also like to read science fiction and fantasy novels — the longer, the better.
The second way I compromise in the name of balance is by not allocating every spare cent toward debt payoff. While I have consistently made extra payments toward my student loans, I have also taken vacations, gone to happy hours, and (most recently) bought a house. Now that I am a homeowner, I want to furnish it with items I love. I will of course be looking for the best deals and saving until I can afford to pay for the things I want in cash. However, I'll be spending some money that would otherwise be allocated toward my student loans. And I'm OK with that.
I'm motivated by forgiveness
Yes, I have a significant amount of student loan debt. Yes, I could have gotten the same education with far less debt, or not gotten the degree at all. However, I did get the degree, and I did accrue the debt. It's a sunk cost at this point. What does that mean exactly? It means the money's been spent whether I beat myself up about it or not. I don't gain any financial advantage now by being miserable about the situation.
So I choose to forgive myself. A big part of that forgiveness means allowing myself to have work-life balance instead of working 80+ hours a week. It means allowing myself to spend some money on things other than debt payoff. However, it also means not engaging in negative self-talk. It means refusing to believe that I'm stupid or worthless or a bad person because of my debt. Part of my motivation in writing for GRS is to encourage those who might otherwise have taken out student loans to think twice about it. I think that's a good deed. Another motivation is to help those who have significant student loans (or consumer debt or whatever it may be) understand that taking financial responsibility doesn't have to include self-flagellation. I think that's another good deed.
I'm motivated by what I've achieved so far
In my last post on motivation, I talked about celebrating your successes. While I obviously think that's important, it's not exactly what I mean by being motivated by your achievements. Rewarding yourself with anything from the afternoon off to a Caribbean cruise can be fun. However, equally fun (at least for me) is keeping a running list of your achievements to refer to when the going gets tough or the road seems too long.
Those achievements can be financial, like a tally of the amount of debt you've paid off or the size of your emergency fund. However, if there are other achievements that you're proud of, by all means include them on the list! I am proud of my degrees and think that they show I'm capable of achieving difficult things even if they take years to accomplish. In other words, many of the skills necessary to earn my degrees are applicable to my debt situation. That knowledge is tremendously motivating to me. Maybe you ran a marathon or learned a new language or raised a child. I bet you also picked up some transferable skills that can be applied to your finances!
I'm motivated by the finish line
As a result of the foreclosure of the condo Jake and I were renting followed by purchasing our home, we have gone six months without making a housing payment. Prior to this, I never imagined what that would be like. Now that I've experienced it, however, my eyes have been opened! Every debt that you can pay off decreases the amount of money you need to earn in order to live well. And since my student loan is practically mortgage-sized in and of itself, being free of those two debts is just about the most exciting thing I can imagine.
Being motivated by the finish line, of course, only works if there is a finish line for which to shoot! One of the core tenets of Get Rich Slowly is that goals are the gateway to financial success. (Actually, goals are probably the gateway to any type of success.) While you may have to meet monetary milestones to accomplish your goals, however, you'll probably be a lot more motivated if you can imagine how success will change your lifestyle for the better.
In other words, money's only a tool to help you live the life you want. So start by imagining that life and work backward from there. The monetary milestones necessary for me to achieve my goals and for you to achieve yours may be the same. However, our finish lines might be quite different. That's why they call it “personal” finance!
What kind of life do you want for yourself? How do you balance your current quality of life against your future needs and goals? How do you forgive yourself and move on from setbacks? What achievements make you feel the most proud?
Honey Smith has been reading GRS since at least 2008, right when she got her first â€œrealâ€ job and started getting serious about finances. She and her husband Jake are in their mid-30s and recently bought a home together. Currently, she manages graduate programs at a large state institution, and he is an attorney at a mid-sized firm.
Between them, they have paid off approximately $30,000 in consumer debt since she started writing for GRS in 2012. However, they still have nearly $200,000 of student loan debt, so she will continue to chronicle their debt-paydown journey. In addition to personal finance, Honey is interested in vegetarianism and cooking, gardening (despite living in the desert and having a black thumb), issues in higher education (including the student loan bubble and the slow death of tenure), and animal rights; however, her heart lies with fantasy novels, trashy TV and Skyrim.