Vowing to improve your money situation can be an exciting decision. Reaching those goals is exciting, too. But there's a long stretch in between those two points that can really test your stamina. Many people start to feel discouraged when they're paying off credit cards, saving for retirement or tackling their student loan. If your financial patience is being tested, here's how to deal with it and stay on track.
Set Smaller Goals
There's a pretty simple way to shorten the length between setting your goal and achieving it: set smaller milestones. When you break up your larger goal into smaller, manageable pieces, it seems less daunting. Plus, it gives you more opportunities to pat yourself on the back, and that keeps you motivated.
This is why the "debt snowball" is the most effective method for paying off debt. If you're not familiar with this method, check out our post on the topic. But it boils down to paying off your smallest debts first, because you stay motivated by the momentum of repayment.
It doesn't make sense mathematically, but, as evidenced by your financial burnout, much of personal finance is about mindset.
If your goal isn't about getting out of debt, or if you only have one big debt to focus on, there are other ways to set smaller milestones. Allow yourself a small celebration after paying off X amount. Instead of telling yourself, "I want to save $5000 this year," change your goal to: "I want to save $400 this month."
Seek Like-Minded People
Wise Bread's co-founder, Lynn Truong, told CNN that one of her best money tips is to keep like-minded friends:
"Good money management is a lifestyle. If you surround yourself with people who share the same values, you're more likely to stay on track."
This can be especially true when you're feeling discouraged. Financially savvy friends will help motivate you to stay on track.
Accountability goes a long way. Consider partnering up with a friend who's also trying to reach a money goal. You can check in with each other, bounce ideas off of each other and remind each other of your progress.
It may also help to find an inspirational environment that reminds you of your goal. This might mean reading finance blogs (ahem) or attending money workshops. Don't be afraid to talk about your discouragement, either. Your PF Pro suggests:
"Reach out to a friend or browse through the personal finance blogosphere for answers. Turn to your connections and contact someone who might have already reached a similar goal to see what kind of tips they might have, or advice for moving forward."
Make Saving Fun
When I was paying off my student loan, I worked quite a bit. I had a full-time job, and I found side gigs to increase my income. But, eventually, I felt like I was in a debt payoff rut. I became demotivated. To reach my goal quicker, I researched the various ways I could save money on everyday expenses. Being frugal kept me motivated and on track.
Frugality is a relatively easy way to boost your savings, and there are ways to make it (kind of) fun.
Consider downloading some fun financial apps. "For me, there's something about seeing my money in a different way that gets me excited," Joanna of Our Freaking Budget writes.
What's more, you can make frugality a challenge. Our Freaking Budget elaborates:
"How many days can we go without spending a cent? How many creative meals can we create before going grocery shopping? These challenges are especially effective during weeks when we feel like we've gotten into the habit of spending."
When it comes to saving, here are a few of my favourite money challenges.
Avoid Money Temptations
Just as keeping like-minded company will help you reach your goal, hanging out with spendy friends might deter you from your goal.
This isn't to say you should avoid your spendthrift friends altogether. But maybe avoid going shopping with them, as they might tempt you to spend money that could otherwise be used toward your goal.
If you have an online spending problem, check out our tips on how to avoid impulse online shopping. A couple of them include:
- Don't store your credit card info online.
- Block sites during your peak impulse times.
We've also written extensively on how to avoid impulse spending in general. Some of our tips:
- Use the HALT method: consider your feelings. Are you shopping because you're hungry, angry, lonely or tired?
- Tape your financial goals to your credit or debit card.
Cut Yourself Some Slack
That being said, it's important that you budget yourself some room to enjoy yourself, too. Depriving yourself of all indulgence and creating a too-tight budget can quickly lead to financial burnout.
Again, it makes sense mathematically to live bare bones and spend only what you need. But budgets need to be realistic to work. While you don't want to overdo it, there are ways you can allow yourself small splurges to stay motivated and avoid discouragement. For example, you can:
- Allow yourself a splurge each time you reach a financial milestone.
- Simply create an expense for splurges in your budget.
Visualise Your Goal
It might sound cheesy, but it works. Remind yourself of why you're working toward that goal in the first place. Aside from the obvious, why do you want to be out of debt? Is there something specific you're saving up for? Do you want a different lifestyle?
Keep this greater goal front and centre. Our own Alan Henry gives a few examples of how to do this:
- If you're saving up for a home, put a photo of your dream home on your desk.
- Saving up to buy a car? Make it your desktop background.
- If you want to save up to see the world, set your home page to the cruise line you want to take.
As you're conquering one stage of personal finance, focus on the next. For example, if you're in the process of getting out of debt, spend time reading up on how to save for retirement or get started with investing.
The benefit of this is twofold: you'll stay motivated to complete your current financial goal to reach the next, and by the time you get there, you'll be ready.
Most of us have had to endure the long stretch in reaching our money goals. It can be hard to stay motivated. Keep your eye on the prize, prepare yourself for the next stage, and allow yourself some celebration in the meantime. This will help make you remember that the wait is totally worth it.