Staying Motivated
Posted by Gail | Filed under Budgets, Life Lessons
It’s tough staying motivated when you’re living on a budget that’s tighter than a nun’s knees and you feel like it’ll never end. Well, you know how people go out and buy a lottery ticket so they can dream big for a week? Here’s something you can do that will not only put some dreaming back into your life, but help keep you moving towards Debt-Free Forever.
Imagine for a moment that you have finally paid off your last debt. That likely means you have all that money you’ve been snowballing for debt repayment that can now be incorporated back into your budget. It’s almost like getting a raise, right? So what would you do with that money? How much would you save? What goals would you start working towards now that you have a couple extra bucks? And what new spending categories would you add to your budget?
Head on over to the interactive budget and recalculate your budget assuming your debt is gone and all that debt repayment money is yours for the keeping.
This is a great exercise for three reasons:
- You will remind yourself of just how dumb debt is.
- You will enjoy the anticipation of being debt free and that’ll help keep you on track.
- You can start planning what you’ll do with the money once you do get to debt-free forever.
This third point is just as important as the first two. Sometimes, having finally achieved debt freedom, we become intoxicated with all the extra money we have in our cash flows. The danger is that we may start thinking of ourselves as “rich” and stop paying attention to the details.
The flip side of this is the unwillingness to spend that sometimes comes after years of living carefully. Having scared ourselves to death and promised to always be vigilant in not “wasting” money, we find it extremely difficult to go out and spend.
Both these reactions are just that: reactions. They are emotional. They aren’t based in logic or sound money management. And one of the best ways to overcome them is to start looking at how life will be different down the road so you can get used to the idea of finally being debt-free.
No one says that the first budget you make has to be the budget you end up living with. This is your opportunity to practice, at least on paper, how you’ll deal with the extra money you have in your cash flow once the final payment on your debt is made. At first you may want to just blow through some money because you can. Or you may finally be able to start saving towards home ownership, going back to school, or a long-wished-for family vacation.
It’s your money. You can do anything you want with it. Take your new budget and post it up on your bulletin board or on your refrigerator. Look at it. Enjoy it. And as you get used to the idea of having more money to spend, think about what it is you really, really want. Adjust your Debt-Free Budget as you figure out what’s most important to you. Stay focused on the future and how great it will be to have eliminated the weight of debt you’ve been carrying. Dream. And think.
Eventually, you’ll tweak that budget to be just what you want it to be. In the mean time, anticipating how life will be different will help you see how what you’re doing without today will bring a big payoff tomorrow.
June 25, 2010 at 7:25 am
Gail, that’s a great idea. I’m almost at the six month mark of my plan to be debt-free (not including my mortgage), and I am thinking about saving for a family vacation after the monkey is off our backs. I love the idea of crafting a draft budget now to get a clearer picture about what a future without this debt can look like.
I find having a picture in my head of what the outcome will be is very motivating. This will help fine-tune the lens! Happy Friday.
June 25, 2010 at 7:39 am
I’ve been debt free for a few months now, having taken care of the remaining student loan in the spring. My budget hasn’t really changed though. I’m currently taking loan money and using it to max out my TFSA and my RRSP.
I am giving myself a bit of a reprieve though. I’m allocating an extra $100 that I can spend on whatever I want, though if I don’t spend it, it goes towards RRSP or TFSA savings.
My goal is a home in 5 years, so that’s a significant chunk to save up for, not to mention saving for whatever life surprises occur (e.g. apparently, a cousin has a wedding coming up)!
June 25, 2010 at 8:49 am
Before I paid off my student loans I had decided that once the loans were paid off I wanted to spend one month’s payment on something “fun”. Had no idea what, just something fun. Paid the loans off in March and still didn’t know what I wanted!!! In June a friend took me kayaking for the first time and I fell in love with kayaking. I found a kayak for the same price as a student loan payment – had a wonderful summer of cheap daytrips – was able to save for home maintenance and emergency fund and this year – real vacations
I also increased my monthly mortgage payment and this year was able to put a lump sum down on it as well.
It’s amazing how freeing getting rid of debt is. Can’t wait til the mortgage is gone too!
June 25, 2010 at 9:03 am
I’m considering loosening the purse strings considerably – my last debt, my mortgage, cannot be paid off in advance of my renewal date next year. There won’t be any amount owing when it comes due, so there’s no need to save a lump sum.
I think, sub-consciously, I’ve realized that, and I’ve been spending beyond the budgetted amounts already (on food and fun). It’s time to formalize that so I can make it more conscious spending.
June 25, 2010 at 9:38 am
Lately I’ve been asking why it feels like I’m living as tightly as I did when I was paying off my debt? This message this morning reminded me that my big bonus to eliminating that car payment was being able to afford my own apartment! No more roomates!
Thanks!
June 25, 2010 at 9:41 am
I find a key to staying motivated is to focus on the little victories. For instance, I’m trying to lose some weight (at 5′10″ and 200lbs I don’t consider myself severely overweight, but apparently my doctor does) and so rather than focus on the weight loss or whatever, I focus on if I’m eating healthier that day, or didn’t have any booze, or went for my run – that day. It’s all about that day, and I figure tommorow will sort itself out if I look at today. I imagine debt repayment is the same thing, if you focus on what needs to be done vs what you’ve done today, it may get demotivating.
June 25, 2010 at 9:48 am
The best way to avoid losing motivation once your debt is paid off is to automate everything so you do not have more spending money than you did before.
We automate our mortgage payments and overpayments, RRSPs, TFSAs and savings account for yearly vacations and a newer car (when we have enough $$) every payday. This way we really only see the portion of our paycheque that is allocated for day to day expenses and fun and the rest is tucked quickly away into other accounts.
It’s so easy to have an inflated lifestyle once your income goes up and/or debt becomes eliminated but by automating everything we don’t see a difference.
As our incomes go up so does our mortgage over-payments and RRSP savings. Once we have maxed out our RRSPs and paid off our mortgage completly we will finally enjoy the extra money on wasteful (but enjoyable) things
June 25, 2010 at 10:20 am
I like this idea!
I think I may even do it in case I win 50 million. There would need to be a category for Juan the pool boy….
But sincerely, love the idea.
Have a great weekend all!
June 25, 2010 at 11:06 am
In our marriage prep course 9 years ago one of the sessions was lead by another couple from the church where the husband was a financial planner.. he talked to us about money management and saving for retirement.. the thing that stuck with me all these years was his comment that he had seen so many people live on the “cheap” their entire lives- always denying themselves something saying they would do it when they retire. Then these people retire and lo and behold they can’t enjoy all this money they accumulated because they had lived the best 40 years denying themselves things and werent about to start spending now. His message was to find the balance in your life to enjoy life now will securing your future so you can enjoy it as well…
I find my husband and I suffering from the feast or famine mentality alot.. we will be super mindful and frugal for a good chunk of time and then the needs and wants start piling up and it’s like our bank account balance disappeared in a puff of smoke…work in progress I guess..:)
June 25, 2010 at 11:34 am
I think automated savings are a good idea so that money is not seen as available for spending. Once debts are paid it’s still important to use a large portion of that freed-up money to save for a new car, furnace, roof, etc. I found it very motivating to know that when I needed a new car I wouldn’t have to buy a used one and could pay for it in full at time of purchase. It’s also relief to know that when something like a major appliance reaches the end of its life span there is money available to buy a replacement without touching the emergency funds.
June 25, 2010 at 11:35 am
Another great idea Gail. We don’t admit to each other that we have a plan for the extra money, but we do. And we will spend it!
June 25, 2010 at 12:33 pm
I’ve done this a million times-I think I get a wierd sense of satisfaction knowing what the budget could like under various circumstances, both good and bad…no car payment, no mortgage (even though that’s many moons from now) if I got laid off, if husband got laid off, etc.
I also maintain motivation to reach goals by calculating how long it will take to acheive them under various cirucmstances (e.g., if we put this much each week into the emergency fund, how long until we have X amount). I figure I’ll do whatever tricks it takes to keep me on track to reach my goals!
June 25, 2010 at 12:37 pm
When our debts were paid off and we had finally begun to built up emergency and retirement funds we were faced with both problems – the desire to go wild and the fear of spending any money. We were hit by a pack of emergencies while paying off debt and also right after which also made us spending shy. But focusing only on the possible bad things in life is like a self fulfilling prophecy. We are still saving but have a planned spending column in our budget. I love doing our budget on an excel spreadsheet because you can add as much detail as you want. And for us success has been in the details. Our Planned Spending budget is actually divided into several categories so as each progresses we get more excited and because we are working towards many things we are a lot more confident in our ability to save, stay out of debt and spend.
June 25, 2010 at 12:52 pm
I find my husband and I suffering from the feast or famine mentality alot.. we will be super mindful and frugal for a good chunk of time and then the needs and wants start piling up and it’s like our bank account balance disappeared in a puff of smoke…work in progress I guess..:)
This is so true Amy….We are going through the same thing..I had a good sum in the emergency account which was basically cut in half with additional unexpected expenses that we had not thought about. I was really happy the $$ was there however looking at it now I feel its hard to keep motivated.
But I keep thinking that in 3 years we are going to be debt free with the exception of our mortgage as we are paying our only crd card & then will be paying off our car loan 3 years early….it seems to be a long road ahead but this site keeps me on my toes
Lyne
June 25, 2010 at 12:56 pm
wonderful idea! i like the idea of seeing even $100 go back into my budget, so i can re-allocate to savings, retirement, emergency fund, someplace where i can watch it grow. i’ve re-worked my budget twice in the past 3 months, since i seriously dedicated myself to debt payment and it’s been not only a great learning experience as i see where i am overspending and where i’m a bit short. it feels good to know that i am taking the right steps and will have my cc debt paid off shortly.
the fear i have is, when i get there, what my reaction will be. i have been wondering, and now, with this awesome suggestion, i am going to play with that interactive sheet and see just where i think the $$$ will go. thanks gail!
and to all above, who’ve shared their experiences. thanks for giving me a glimpse of the myriad scenarios & how you’ve resolved them.
geoff & (i think) sparky: yes, good matches coming up this weekend. i shall firmly stick with my oranje and will watch england v germany with much anxiety. don’t you just LOVE world cup????
June 25, 2010 at 1:42 pm
It is so import that you have to plan for the day when the date is payed off and exactly how you will spend/save the extra cash as family. DH and I have been on the same page about debt from the day we started to follow Gails advice. We have been very careful and as result we are out of the woods and able to put a little away and have some fun. But we did not do a good job communicating how we would deal with our money after the debt. The result is that we fight more about money now then we ever did. DH is always wanting to use our extra money for something (hot tub, bbq, vacation). I am always resisting making the big purchases in favour of putting more away. My logic is we have done with out for this long why go crazy now. He on other hand feels we have paid the price for our past and now is the time for fun. Just today we disagreed on on spending for our upcoming vacation I want to budget $100 day for fun (after hotel and meals), he wants to budget double that and have more available in case we decide to do something while we are away. So much work and still more to do…we will find a way to comprimise we always do but what a battle this has turned out be.
June 25, 2010 at 1:43 pm
The last month saw us being less diligent. Now that the savings account is overflowing we weren’t being as careful with our spending. Of course we are playing catch-up this month. I’m not sure what reasoning we used to convice ourselves that we needed such a big barbeque and I don’t know how I ended up spending $80 on a “couple of plants for my flower pots” but it happened. Luckily, we stopped before there was too much damage and we’re back on schedule.
So this last month was a perfect reminder to us that “DEBT IS DUMB”, a la Gail!
(Interestingly enough, the only reason we can bounce back so easily is because we’ve planned for everything else, like our vacation next month that we are paying cash for!)
June 25, 2010 at 1:55 pm
I’m planning on a debt-free celebration for Christmas 2010 – and after I’m debt free, I’m rolling all those debt payments into savings, no spending spree for me. My goal is a $50,000 emergency/opportunity fund. I have all the “stuff” I’ll need for a very long time after years of profligate living.
June 25, 2010 at 2:08 pm
WHEN I am completely debt free…oh, did I mention it will be November 30th, 2010???? Ha!
Believe me – I’m getting twitchy. Anyway, after that date we will owe not one red cent to not one soul. There will be no spending spree here. TFSA’s will slowly be maxed. The rest will be put aside – we may move a year from now…..we’ll need $$ for that.
I’ve been squirreling away $$ for our house being rewired this Fall. He said it would be approx. $3,000. Just about there. Also have the $$ for the cottage rental in August and two weddings (overnight stays) and $$ towards our couple of days for our anniversary the end of August. Starting in September I’ll be socking it away for the rest of Christmas (3 CAA’s is part of that) – I have 1/2 of my Christmas purchases already – so I’m really trying here.
June 25, 2010 at 2:14 pm
Fantastic idea Gail! I think we get so mired in debt-repayments that we forget the ultimate goal of actually having future spending money once we’ve finally stopped paying for past purchases (I think I’ve got a dinner from 1985 still floating around somewhere, and it likely wasn’t even that good!). Time for some daydreaming to remind me of how far I’ve come, where I’m going, and just how good it’s gonna feel to get there on my own!
June 25, 2010 at 4:49 pm
Mo – just remember that you can allocate your entertainment and food budget for the time that you are away into your spending money while on vacation!
So like the first poster, we are hitting the 6 month mark on our budget to repay all of our debt in 3 years. We have paid off over 10,000$$!!! Thank you Gail.
We are now on track to complete at least 2 months early and are looking at lowering our interest rates even lower to drop another month off. Looks like lowering it by 2.5% will save us $1103 in interest so that is cool. We also plan to put any extra money we can onto it also because we can’t wait to be debt free.
We have decided to both get a whole month of debt repayment to blow on whatever we want. I am still thinking about it but my husband wants laser eye surgery.
June 25, 2010 at 5:10 pm
I get depressed just reading about how many are debt-free, and people like Stephanie, who have just paid over $10 000 of debt in 6 months… I don’t even make that much myself, but I am very glad that there are people doing so well and they deserve to have their moment to shine…
We have 3 years to go before we are completely debt-free — I find it hard to balance the savings and the debt, wanting to save more, but also wanting to get rid of the mortgage too, and dealing with, as previously mentioned in other posts, the dying of appliances all at the same time. I fear that our money, when debt-free, has already been spent — we will be finally putting on a garage, and we will be in need of a new car by then (one added driver to the house), and don’t see how we will see any ‘extra’ money for quite some time…. However, at that point, my husband’s RRSP will be maxed out, then more money will be devoted to mine… does it ever end? And my eldest will have money in RESP’s but we’ll be starting to build my younger child’s at that point…
Enough whining….
I am happy that we are able to do all of these things. We are very fortunate… someday, I would love to just blow a pile of money on something completely unnecessary but fun…
June 26, 2010 at 12:39 am
I ‘like’ my current budget. There are few things that I would like to do that are not free. There is no room for that.
After I finished paying the student loan and the car, I became more agressive with RSP contributions, future-home saving, and setting up a car maintenance account. It is a bit depressing that I do not feel ‘richer’ (although I am financially) but I do feel the freedom of being debt-free and less worried about making payments in case something bad happens.
Maybe one day I can allocate more money to fun things do… but having the miscellaneous repair /pre-planned-and-mostly-unwanted-expenses accounts seem to kill the fun. The financial peace is there, the consumer spending is controlled.
June 26, 2010 at 1:39 am
I hear you Cas. It is tough sometimes to hear how “far ahead” some people are but who knows what the future brings? I think that even just starting now to be careful and diligent even on one income while I am in school we will at the very least not get further behind and probably start getting ahead. Maybe a better job or a promotion will come your way, who knows but don’t give up hope yet. I am just trying to focus on doing my best today and will wait to see what tomorrow brings.
What is a TFSA? I am in the states I don’t know if that is a Canadian thing or something.
June 26, 2010 at 2:08 am
My debt-free budget kept me motivated whenever I was feeling down about debt repayment and not being able to do all the things I lusted to do. I’d just look at it and dream of all the things I would get once the debt was paid off. Then once the debt was paid off, I moved a bit more to fun, clothing and gifts and basically began saving for emergency fund, house repairs, retirement and vacations with what was left over.
So now we don’t want for anything really, I’m still careful what I spend my money on, we go on nice vacations, and I’m building that emergency fund, and that house fund for the household repairs that need to get done. Feels good. And the debt-free budget was what kept me motivated.
Thanks Gail!
June 26, 2010 at 8:52 am
Cas, don’t forget that everyone’s situation is different.
I, for example, paid off my student loan quickly by using a high percentage of my take home pay (41%) every month in the last 6 months of paying it off.
Was it difficult? Yeah! But, I don’t have the same responsibilities as you. I only have myself to take care of, not a family.
I only pool my “joint expense” money with my BF ($850 a month). I don’t have a car, I have a metropass ($100 a month). My entertainment was cheap movies, free things, etc. I used my tax refund (always high because of $$ back for my education amounts) to further pay it down. Gift money and one of my two “extra” paycheques went into my “fun money” savings account so that I could do things like a cheap vacation, pay for dance class, have a bit of leeway with my monthly budget, etc.
What I don’t have is pets, or a kid(s), or anyone else’s savings, a mortgage, or even really things that break down. I don’t have a car. I’m not lucky enough to have a dishwasher. My laundry equipment is shared, and if it breaks, the apartment pays for replacement. If my fridge, or stove break, the apartment pays for it. The only thing I have to be concerned about is furniture (which if we didn’t have already, we pretty much took from people that were updating their houses), or electronics. Everything else is someone else’s responsibility to fix. Our plumbing was screwed up – we just call the super.
My emergency fund only needs to be able to cover my joint expenses (rent, food, phone/net/cable), metropass, and a bit of fun – my responsibilities are quite different from a lot of people on this site.
June 26, 2010 at 8:54 am
Joy – a TFSA is a “Tax Free Savings Account”. Canadians can put up to 5K a year into it, and the interest earned is tax free.
June 26, 2010 at 11:45 am
I’ve done that sooo many times. Once my student loan is paid off I’ll have $600/month more….it’ll be crazy! Though, also very likely that once it’s paid off we’ll be buying a house shortly after – so there won’t be much time w/ more money (and the more money will likely go into our house fund). That said – it’s still fun to imagine what you could do and where you could go w/ that much money injected into your budget.
June 26, 2010 at 2:10 pm
We have 2600 left owing on our line of credit and once its paid off (again) then we will be getting rid of it and building our own line of credit… this way temptation won’t be there anymore!
June 26, 2010 at 9:03 pm
@Cas ~ do not despair. I’m a lot older than you and am not debt free yet. You are way ahead of the game. Wish I’d paid attention to my finances years ago when I was your age. Because you are budgeting and paying down debt (heading to be debt free) – and have savings as well – you are doing just fine! My Dad always told me you have to creep before you walk. So you’re creeping. You’ll be victorious! Right now…I’m still hanging onto the furniture and taking wobbly steps. Hang in there!
June 27, 2010 at 10:42 am
@ Emma: thanks for putting things into perspective for Cas and others who are feeling disappointed that we don’t seem to have the same ‘drive’ to become debt-free. I know I certainly forget that others aren’t the same as me: 2 kids (RESP contribution $ required), a mortgage and bills that go with it, pets, RRSP contributions, emergency fund contributions, and trying to get out of debt.
I look back at my early 20’s and wonder why the heck I can’t get ahead as quickly as I did then given my salary is about 4 times as much as I made then, but I obviously forget what you reminded me of. I’m married, have kids, have a vehicle, have things that really need savings (RESP, RRSP, TFSA), etc plus the whole debt thing. I used to pay off my cc as soon as it came in in my 20’s, but then after vehicles, kids, mortgages, etc. it got harder to do.
Thank you so much for the reminder that life has changed for some of us, and so to should our expectations of ourselves. It’s a reminder to not be so hard on ourselves or see ourselves as “failures” because it’s taking us 3 years instead of 12 months to get debt-free. But I wouldn’t change any of what I have and have experienced to be debt-free sooner…besides, I think my kids would put up a fight if I tried to give them away!
Take it easy Cas, you’re doing all you can and it will happen. Know that and feel proud of where you stand today.
Peace
June 27, 2010 at 11:16 am
Always remember the Prize “Debt Freedom” is a wonderful feeling. I set lofty goals at a early age after getting onto the credit card debt cycle, I was paying the minimum each month happily and just getting by them I woke up to high interest rates and “poof “the cycle broke almost overnight. I set an age limit of 40 to pay everything off, mortgage included, we worked hard tracked everything on a spreadsheet so we could see the debt drop and we debt free completely on my 39th b-day. The only thing I find is now with no debt schedule to follow I have become a little undisciplined, we save over 35% of our income to retirement but I still wonder if it’s enough. One can only hope so, we’ll know in another 14 years or so.
June 27, 2010 at 11:20 am
Keep your head up Cas, it sounds like your determined and on track. Make sure you have it on paper I found the visual pushed me ahead and watching the debt drop helped greatly.
June 27, 2010 at 1:26 pm
I feel so silly now for whining, when there are SO many supportive, encouraging people and comments out there. Thank you! You all help keep it in persepective when mine gets a little off, which is why I keep coming back to this blog. Everyone has their own story to tell, just as everyone is on their own path, and at different stages.
I am sometimes hard on myself — got to remember “to not should on myself”… I know that we are not saving as much as we could be, that we are not as disciplined as others… part of that goes with being married, and still not having the same perspectives yet on our finances… part of it also is knowing how hard we struggled in our earlier years, and how maybe we just don’t WANT to penny pinch all the time, but we are putting money into savings now, and we will be fine, even if it never seems to end! And even as more obligations come up, at least we will be debt-free, and better than being on the other side of that coin.
And if it was all easy, then that would be boring, and we would have missed out on some learning, relationship building, and teaching experiences for our children.
So, to Goal 0 Debt, Michelle, Catherine, Emma, Joy and all the others — best wishes on your journeys as well, and thanks for putting it all into perspective for me again!
June 27, 2010 at 2:21 pm
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June 27, 2010 at 6:34 pm
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June 27, 2010 at 9:47 pm
Our payoff schedule has been extended a bit for the student loans (from 2 years to 3) because of my upcoming maternity leave. It would not be possible to continue the aggressive payments with the new budget.
The good news is that we took the time to calculate our income during that period and we were able to adjust our budget accordingly.
June 28, 2010 at 4:10 am
We lost everything in the financial crisis almost 3 years ago and it has been a very slow road for us but I am so happy to say that we will be debt free in December 2010. I am so excited. It was hard to stay motivated sometimes and it was funny how I’d sometimes ‘rebel’ by overspending on the grocery budget, like it was okay because it was food. Now my husband and I have stopped fighting about money and are planning some slight changes to our budget next year like regular video nights and maybe enjoying the odd meal out as a family. But we will save to buy a house again and look forward to a healthy, affordable mortgage instead of an unmanageable, variable one. Lesson learned.