This is a guest post from Jackie Beck, who writes at MoneyCrush. She writes about things like Straying from the Path of Intention to Impulse, Saving Money with Meal Planning, and Don’t Forget the Third Option.
Do you have any big financial goals? If so, chances are reaching them may seem impossible at times. Maybe you even feel like giving up now and then.
Those kinds of feelings are only natural, but in order to reach our goals, we have to keep going. And that requires maintaining motivation.
My husband and I are working on a big financial goal right now: paying off our house. We want to be completely debt free, and we’ve been working on that last step for a while now. As of the day I wrote this, we were down to owing $83,687.18.
(Yes, I know the exact balance, and that’s part of the trick to maintaining momentum.) You see, when you’re reaching for a big goal, you’ve got to track your progress.
And you’ve got to feel like you’re making progress. Now I happen to be the kind of person who gets excited at sending even an extra dollar to our mortgage. If I’d sent in an extra dollar today, I would have literally told my husband “Yay! Now we only owe $83,686.18! We’re making progress!”.
(Having a cheering section helps too, so find a buddy to cheer you on.)
My husband, however, is not as easily motivated. $83,686.18 still sounds like a lot to him. And it IS a lot, which leads me to the next method: Break big goals down into manageable amounts.
$41,843.59 sounds a whole lot more doable than $83,687.18, doesn’t it?
And I bet $20,921.80 sounds even more doable.
$10,460.90 might sound downright easy in comparison.
All I did with those numbers was divide them in half several times. Once a number sounds pretty darn doable, make that number your next target.
Then celebrate each step along the way. Paid off that first $10,460.90? Get up and dance around the room, call up your friends and family, or do whatever feels like a celebration to you.
Focus on the right things, too. Spend regular time daydreaming about what life will be like once you have achieved your goal. We often sit around talking about what it will be like to not have a mortgage payment — the things we’ll do, the freedom we’ll have, how great it will feel.
Use every trick in the book, and you’ll maintain your motivation and do what it takes to reach your goal.
Crystal’s Questions:
Do you use this method to succeed? If not, what tricks do you have up your sleeves?
I think your idea of visualizing the exact amount you owe is a fantastic idea, and one I am going to try and implement. I owe about 149,000 on my mortgage, and that is our only remaining debt. If I picture that amount being reduced for every expense I bypass (and actually apply the money toward it), I can picture that number going down, which will motivate me not to buy. How fun!
Thanks for the great idea!
Sounds good to me ladies!
Y’all are SO LUCKY to have small mortgages actually. If you want to get a house in a normal neighborhood in San Francisco, we’re talking $800,000 at the LOW end and at $1.2 million for something average!
I used milestones to make paying of the mortgage a little less like a dreaded chore especially for my wife).
What I would suggest is much like you state break up the mortgage in 10,000 or 20,000 allotments. I used $25,000 initially but then dropped the milestones to $10,000.
Then everytime you pay off a given allotment, you effectively passed a milestone.
Whenever we passed a milestone, then we would go out to eat somewhere fancy! While it’s a little reward in comparison, it was still nice! Kind of a way to say good job to yourself
@everyday tips: Let me know how your progress goes. Maybe we can be mortgage eliminator buddies
@Financial Samurai: I knew there was a reason we don’t live in the Bay area. On the other hand, it sounds like prices have dropped there too like they have here.
@Money Reasons: I’m all for rewards
@ Financial Samurai:
Those low mortgage balances make me envious, too! I am on the East Coast, and we owe 230,000 for 27 more years! I don’t expect we’ll pay it off anytime soon and once the kids are off to college, we plan to downsize to another house w/half of the square footage.
Only problem is what if the kids want to come back after college (likely)?
Anyway, nice post and a great method to use in order to stick w/your goals!
I visualize how every expense I bypass – or every little savings I make – can help me reach my goal. It’s all about opportunity cost, when I look at it this way.
For example – Lets say that I have a goal to save $100,000. If I had a choice to get a diet coke for $1.00 or have water for free, I choose water thinking of the $1.00 saved as bringing me closer to my goal. Then, where I get more excited, is thinking of the additional ways I benefit. For example, I think of my health (more important than money to me), and as it relates to money I think of lower medical/dental expenses by drinking water, down the line. I also think about being more energetic and productive by being healthy. It’s those motivations that really get me going toward that goal.
Long answer, I know.
This post really spoke to me, because I try to do the same exact things to keep my husband motivated! I too know the details of our mortgage balance and net worth any given week while he doesn’t quite get the same excitement I do from tracking it – and he sees the $213,000 we still owe as a much bigger obstacle than I do. I’m right there with Financial Samurai & Holly – I envy the small mortgages! We live outside of Philadelphia and bought a house that was right about average for our area for $310,000 two and a half years ago (10% down). I reminded my husband that we are close to having paid for 1/3 of our house, which he got really excited about! We’ll probably go out for a nice dinner and splurge on a nice bottle of wine when we reach it, by the end of this year. I just hope we can keep up this pace when kids come into the picture. It will be a challenge I’m sure, but knowing what we’ve accomplished already helps give me faith that we can accomplish anything we set our minds to.
For everybody envious of small mortgages, don’t you all make more to pay off the larger prices? That’s a sincere question, not a rebuke or whatever it may sound like in writing. If I was still only making $35,000 a year but living on the coasts, I doubt I’d even buy a house…a mortgage bigger than $200,000 would probably make me cry, but I’ve lived around Houston, Texas my whole life so I’m just used to smaller price tags.
I think that while its true incomes can be higher in higher-cost-of-living areas, I’m not sure that they are proportionally higher… meaning, I’m not sure that if housing costs are double what it they are in one area, that it means the average income is necessarily double. Or in Financial Samurai’s case, many more multiples higher. I don’t know for sure, though!
Aurora, yeah, after thinking about it a little, I thought it probably couldn’t be directly related either. I’m just thankful that my family is around here since my financial mindset has been formed around the local prices.
Hi, BFS- regarding your question of home prices relating to income:
Yes, our mortgage is equal to 2X annual salary; still we wish we had stayed in our modest and affordable brick ranch (our first home). We had contracted for a new home in 2003. It was supposed to be built in 4 mos. maximum, and we sold our home and passed the time w/in-laws (we could not get a contract with a contingency clause — we were required by the builder to sell).
Unfortunately, a whole year later and well into the housing bubble, we were told that the builder was having trouble getting the proper county permits and that we would still be able to get the home, but at a newer and much higher price. The builder also said that they could not say when they would be able to build it. We thought of suing, and could have won, but the attorney’s fees were already at $1000 and we were getting nowhere. The builder actually ended up declaring bankruptcy.
Short story long, we sold our cute (completely re-modeled) house pre-boom (so we didn’t ‘cash in’ like others did shortly after!) and were forced to purchase another home after prices were inflated. Truly an awful experience and it has put us behind in reaching our financial goals.
Holly, if I could see you, I’d hug you. That whole situation sounds like a nightmare. Do you at least like the home you ended up with? I think you’ve mentioned it in other comments before…you have my total sympathy though.
Financial Independence Compilation…
Welcome to the July 11, 2010 edition of financial independence.This week, Your Financial Independence is highlighting 2 recent posts. Please do take the time to review them and post your feedback.Than……