Motivation and money

Especially for those of us like me who are in the midst of the long, hard slog of debt pay-down, staying motivated can be tough. How do you keep your excitement up and your determination high when financial independence is barely visible on the horizon? Here are some methods for staying the course when your goals will take months or years (heck, even decades) to achieve.

1. Keep Your Goal Visible.

This is one you tip with which you may be familiar. Let's say your goal is to move someplace tropical when you “retire” (sarcastic quote marks because there are so many definitions of retirement). However, even early retirement is years or decades away. How can you keep your goal at the forefront of your mind? Turns out there are plenty of ways!

You could make your computer's screen saver a picture of a hammock on the beach. You could pick a personalized design for your credit card that reminds you of what you really want when you're tempted to spend. I read a blog recently that suggested making passwords incorporating phrases that remind you of your goals, like RetireInBelize2045. Finding a way to make the far-off a part of your everyday life may help you keep your eyes on the prize.

2. Make Yourself Accountable.

Declaring your goals publicly can be a great strategy to help you stay focused. This is in no small part because when you let others know your goals, they will often speak up when you are in danger of going off course. True story: When I was in sixth grade, I decided that I needed to lose weight (sigh). My solution was to tell all my friends that I was allergic to chocolate. Anytime I went near a candy bar, their chorus of concern would stop me in my tracks.

Now, to be clear, I don't recommend lying to your loved ones. What was I thinking?! Oh, well, at 11 years old, your brain's barely developed. You're bound to make some silly decisions (at least that's what mid-thirties me would have you believe). My point is that if you have supportive friends and family, sharing your goals with others may lead to a timely reminder of what's really important in a moment of weakness. I share my goals here on GRS. You can, too, via a reader story or in the forums.

3. Switch Your Strategy.

There is only one path to wealth: Spend less than you earn. But there are two main approaches to achieving that goal: You can cut your costs, or you can increase your income. Many people align themselves more closely with one path over the other; however, it would probably be wise to spend some time thinking about both sides of the equation.

One way to avoid losing interest (and thus, momentum) is by periodically shifting your focus between the two approaches. Maybe this month you spend some serious time with a spreadsheet, analyzing your grocery store purchases and identifying ways to cut back on food costs while still eating well. Then next month you go through your closets and garage to find items to sell on Craigslist or eBay (or IDoNowIDont.com on the off chance you're trying to sell an engagement ring that was a poor investment). The following month you comparison shop for car insurance, and the next month you pick up some overtime at work. You get the idea!

4. Celebrate Your Successes.

Turning your long-term goals into short-term goals can give you a sense of urgency that may help you keep motivation alive. For example, “pay off $90,000 in student loan debt” seems like it is too hard/massive/impossible to get excited about. Even if I make an extra payment of a few hundred bucks, I don't feel any closer to success. On the other hand, let's say I set a monthly goal along the lines of “make at least one extra payment of at least $500.” Suddenly, I feel like I've actually accomplished something when I make the exact same payment. Same money, different perspective, more motivation.

Once you've achieved your short-term goal for the month, you can think about a reward. However, it's important that you don't break the bank with rewards. Is there something free or nearly free that you can use as a motivating goal? For example, if retiring to that tropical island is your dream, you can spend some time online looking at real estate in that country or geeking out with a cost-of-living calculator. Or maybe you reward yourself with something really nice after six months of extra payments instead of rewarding yourself every single month.

5. Take a Break!

Every minute of every day doesn't need to be spent obsessing about goals and finances. It's true! Sometimes giving yourself a break can be a reward in and of itself. Let's say you make six months of on-time extra payments. Go ahead and give yourself a month off. Maybe you use the money you would have spent to buy yourself something (see #4 above), or maybe you just stick it into savings. Maybe taking a month off from those payments means that you can can cut back on your side gig and spend some time reading a good book poolside. (It is summer, after all.)

Sometimes taking a break can give you the space to re-evaluate whether this is really a goal you want to keep pursuing in the first place. Perhaps another goal will rise to the forefront and you'll find yourself re-prioritizing to incorporate it. Alternatively, you may chafe at the lack of progress you're making and find yourself attacking your original goal with renewed zeal when your break is over. Sounds like a win-win to me. Taking a break can also help you switch strategies (see #3 above) by giving yourself time to think. If I hadn't taken a break from auto-pay so I could prioritize closing on my house, I never would have realized there was a different way to tackle my student loan payments.

Final Thoughts

Self-knowledge is an important component to motivation. That may mean outsmarting yourself by understanding your weaknesses or spurring yourself to action by playing to your strengths. Once you know what works for you, you can create a plan for reaching your goals that is tailored to your situation and personality.

What long-term goals have you set for yourself? What strategies do you use to stay motivated and make progress?

More about...Psychology

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Seth at Ectopistes
Seth at Ectopistes

Selling stuff on craigslist or ebay is a great idea. Firstly, you get some cash, and it’s surprisingly easy to sell stuff these days. Just this past year I sold a desk, rowing machine, filing cabinet and more to make room for a nursery. All were sold in hours or days without wasted viewings or weirdos showing up. But the other great thing about selling things is it makes you take stock of what you really use and what you do not. By examining your past purchases you will scrutinize your current/future purchases more clearly. As so many of us… Read more »

Honey Smith
Honey Smith

One of my funniest Craigslist experiences: I was selling a table and chairs that folded up and this woman showed up in her Suburban and said she’d driven an hour to come look at my stuff. Then she tried to bargain with me! Since it was clear she could afford it and also probably wouldn’t want to go back empty handed, I was like, “the price is the price.” FTW!

Seth
Seth
Jon @ Money Smart Guides
Jon @ Money Smart Guides

When I was paying off my debt, I set up mini-goals along the way. When I knocked 25% off of my debt I had a small celebration. Same with 50% and 75% of the way there. Even crossing over a $10K line, say from $20,050 to under $20K was a small celebration.

Anything you can do to keep you motivation high is important. The path is long and it is easy to fall off track.

Honey Smith
Honey Smith

I think I’m going to cross a $10K threshold this month! Now I’ll have to think of a mini-celebration.

CERB
CERB

I enjoy doing this too. Each time our mortgage debt is lowered by what I call a “decade”, from $140K to $130K to $120K, I allow myself to really experience the joy of that accomplishment. Same thing when I realized that our ROTH Ira’s were worth more than $100K, I took joy in that. It still makes me smile when I think of those benchmarks.

FI Pilgrim
FI Pilgrim

One of my favorite ways to stay motivated is to create a chart like the one described in the book “Your Money Or Your Life”, where you graph two lines, one for income and one for expenses. Trying to create as much space between those (with the income being on top, of course) is a great motivator for me!

Honey Smith
Honey Smith

I’m a spreadsheet girl myself, I agree having data to input and display can be super motivating.

lmoot
lmoot

All great points Honey. As much as we want to focus on the financial education aspect of reaching finance goals, education means nothing without practice. Same thing with becoming more healthy…most of us know what to do to achieve both, however it’s difficult because in order to do so we have to overcome emotions and create/ quit habits. I’ve always tried to nurture my emotional responses to PF. Sometimes it’s not just about the numbers; sometimes doing the opposite of what is mathematically optimal creates the fuel needed to keep you going. One thing I’ve taken to doing since graduating… Read more »

Honey Smith
Honey Smith

I like the idea that if you’ve got the big picture well in hand, the details take care of themselves, lmoot!

Dave LaLonde
Dave LaLonde

My solution is really simple, but I really do believe that the best thing you can do for yourself in order to accomplish your goals is by staying organized. Be on top of what you want. Your eyes need to be on the prize, similar to like tunnel vision. Having your eyes focused on that one light at the end of the tunnel while everything around you is just passing by.

Honey Smith
Honey Smith

Re: tunnel vision or “Gazelle intensity” as it’s sometimes called in personal finance. I find that for longer-term goals, this actually trips me up, since I can’t be that focused every single day for decades at a time. So I have to find other ways. But it sounds like this works for you!

Vanessa
Vanessa

I guess I don’t really have any goals. There’s no big thing I’m saving up for. I don’t even want a house. All I want is to be able to clothe, feed, and shelter myself for as long as possible. It’s difficult to quantify, which subsequently makes tracking progress impossible.

Honey Smith
Honey Smith

I think you could quantify this! How much do you spend each month? Do you want 6 months of living expenses in an e-fund? A year’s? How much retirement savings will you need to meet your expenses? How much are you contributing? A goal doesn’t have to be something creative to be worthy!

Kathleen
Kathleen

Vanessa, if you haven’t already read it, the maths in this Mr Money Mustache post might be useful to help you quantify that – it helped me to define a goal other than ‘pay off debt’ or ‘buy x’.

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Vanessa
Vanessa

Thanks for sharing that link. I actually don’t have retirement as a goal, which I guess is a good thing since according to that chart it looks quite unlikely, lol!

lmoot
lmoot

Maybe your goal could be to come up with some goals? It’s really important, just for the enjoyment and feeling of purpose of living, to have some type of plan for the future. Hopefully you will think of something worthwhile of your wanting.

Aldo @ Million Dollar Ninja
Aldo @ Million Dollar Ninja

I love this, especially #5. We sometimes get way to caught up in our finances and on saving or making money that we forget to enjoy our lives a bit.

It is definitely important to obsess a little over our finances (if we don’t, who will?), but we also need to have fun and relax.

Honey Smith
Honey Smith

Paying attention is important, but avoiding burnout is equally so, IMO.

Brian@ Debt Discipline
[email protected] Debt Discipline

I keep thinking of life after debt. We are closing in on 100K of our $109K repayment. It’s been a long 4 years, but well worth it. We stay motivated but think of the last payment and feeing up over $2 per month to put to work for us.

Honey Smith
Honey Smith

Because of our unique situation (foreclosure of the place we were renting followed by home purchase), we have not had a housing payment in 6 months. Seeing firsthand the difference that makes to our bottom line was a HUGE motivator for us.

stellamarina
stellamarina

I really like the idea that has been shared on this site before when trying to pay off debt. That is making a big paper chain with every loop representing $100 or $1000. Hang up the paper chain where it can be seen by all and make great ceremony of cutting off a chain loop when that amount is paid off! I guess you could build a chain for savings too….

Curtis@PayOffMyRentals

Excellent post! I have used and am currently using every single one of the suggestions to accomplish my goal of paying off 3 rental house mortgages. 1)Keep goal visible…CHECK! I have a graph on my office wall with the starting point on 1/1/2013 of $177,650. The three mortgages were being paid off in snowball fashion from lowest to highest. One down (on time). The second one nearly down (now at just under $28k) and the third I hope to pay off by the stated goal of July, 2016. Here’s a link to what I mentioned above: http://payoffmyrentals.blogspot.com/2013/01/it-has-begun.html That chart looks… Read more »

Honey Smith
Honey Smith

Way to go!

Alex Thompson
Alex Thompson

Celebrating is an important thing needs to be done after paying off the debt. This leads to the motivation for the further movement.

Komrad
Komrad

I write my goals on the dry erase board in my kitchen and also create a category for them in my monthly budget, which I review at least a dozen times a week.

Once some of my other projects calm down, I plan on making a graph of some sort as well.

Sam
Sam

When we were killing our debt in 2007 we utilized many of these techniques. My favorite way to stay focused was to snowflake, meaning I often sent off (via the interwebs) multiple small payments throughout the month. I’d send an extra $10 or $20 if that is what I could squeeze our of our budget in addition to the bigger and more regular payments. The snowflaking allowed me to benefit via charting, I had an Excel chart set up to track our various debts and those small and big payments meant I could update my chart (something I relished). And… Read more »

Svende
Svende

Great posts everyone. I am currently in a similar situation to most and will definitely be taking up the advice of celebrating every success. I tend to not bother with that too much but then every few months I’ll feel at a bit of a dead end, even though I am making progress.

Main point would be Take Action. As long as you are moving forward in some way it all adds up in the end.

Tony McCabe
Tony McCabe

I used the same strategy when I quit drinking and doing drugs. Everyone has different ways in motivating themselves to get where they want to be. I love how you explained about keeping yourself accountable because in my opinion no one cares, but you so you need to be more dependant on yourself and not others. Overall great post will be reading more on what you have. Thank you!

Tie the Money Knot
Tie the Money Knot

In general, financial goals or otherwise, I try to combine motivation with actual goals. I’ll document long-term and short-term goals for myself, and periodically revisit them to make sure I stay on track. Just by setting goals and holding yourself accountable, you can go a long way to making progress – whether debt reduction or another goal.

Edward
Edward

“Financial independence” isn’t being free from debt. Being free from debt is being at zero. You don’t get a reward or celebration for being at zero–that’s where you started when you were born. Congratulations on getting nowhere! Surely people can set the bar higher than that? Besides, if debt is actually an issue (and you’re still at less than zero), you can’t afford a reward. OK, maybe the fancy frozen pizza instead of the plain pepperoni store brand–but that is absolutely it. Financial independence is generally agreed to mean having enough saved and invested that you no longer have to… Read more »

Shan
Shan

The suggestions above are for helping people stay motivated on a long term goal. Personal finance is not just logical, but also very much psychological and emotional. Let’s say I have $50,000 in debt and I go get a massage every time I pay another $5000 in debt. Maybe when I am getting close to the next $5000 I will look hard for some side jobs on the weekends or something to sell so I can go get that next massage. Now compare that to another person who just wakes up every day and says “Oh my gosh I have… Read more »

A Frugal Family's Journey
A Frugal Family's Journey

Great article…couldn’t agree more with these tips! I especially like “switching your strategy” and “take a break.” We’ve been living the frugal lifestyle for many years now and can say from our own experience that you do sometimes need to do something to get yourself out of a rut! Whether it is changing up your budget or taking a month off, sometimes you need to do something to get yourself back on that train and full speed! AFFJ

Dan @ HWDC
Dan @ HWDC

Great read, all very important. Important to give yourself to time off too, debt can really bring you down and seriously affects your day to day life!

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