Living on Less

How To Stay Motivated When Sorting Out Your Finances

We may earn money or products from the companies mentioned in this post.

How many times have you told yourself that this is the month, quarter, or year that you will get your finances in order? Maybe you do stay on track for the first few days or weeks. You make a budget, you start cooking from scratch instead of going out to eat, and you might even start clipping coupons.

But at some point, the drive you had at first to get your finances in order starts to fade. You might spend too much one day and tell yourself, “It’s okay, I’ll do better tomorrow.” The next day becomes the next week, and the next week becomes the next month. You eventually give up and say, “I’ll try again next year.” Because of this, the advice below will help you.

Photo by Karolina Grabowska

Make Realistic Short-Term Goals

Setting SMART goals is the most important thing you can do to get started with your money. S is for specific, M is measurable, A is achievable, R is realistic, and T is time-limited.

 But that first “S” should also stand for “short-term.” Your goal amount of money might be so big that your mind can’t wrap around it. So you could divide it by four, five, or even 10. Just pick a number you can understand and use that number to set a short-term goal.

 Let’s assume you owe $20,000 in debt. Divide it by five to reach your new goal number of $4,000. How fast can you repay $4,000? Can you do it in three months? Six? Your new short-term aim should be whatever that amount is.

Make A Budget With Room For Fun

When you feel like you’re being punished for trying to save money, it’s easy to lose motivation. You’ll feel as though you don’t have enough money to do anything fun. When that feeling gets too much, you might want to do something different, and you could rebel and start spending what you’re meant to be saving. 

 What really happened was that the enjoyment you were having was irresponsible and led you away from your financial objectives. Having a good time is crucial, and it shouldn’t be entirely eliminated. All you have to do is plan ahead a little more carefully.

 When getting out of debt, purposefully allow for a little fun money each month. This could be as little as $20 or anything else that works for you – but it should be a small amount. In this way, you can have fun, and you won’t feel so restricted, meaning that saving elsewhere becomes easier.

 If you haven’t already, you should make a budget. And if you have already made a budget, make sure to include some room for fun. 

 Build In Reward

Who doesn’t like receiving a gift from time to time? When you’re on a money journey, it’s a terrific idea to reward yourself. You can save yourself a lot of time and frustration by setting short-term objectives.

You could go on a mini-vacation or splurge on a nice supper or a new dress when you’re at home. Make a list of all the things you want to get for your hard work so that you have a visual reminder of what you’re aiming for and keep your motivation strong.

 Don’t Compare Yourself To Others

The journey you take with your money is uniquely yours. It is a one-of-a-kind experience for each individual. If you’re continually questioning why you’re not saving as quickly or paying off your debt as quickly as someone else, you’ll lose all incentive to remain on your money path.

 No matter what their income, you may not be aware of their other benefits, such as free daycare, a parent-helped down payment on their house, or a $30,000 end-of-year bonus. The only thing you can and should do is get to know your personal circumstances.

 On the other hand, you might start to feel down because you have to live on a budget and can’t do any fun things. When you’re trying to live on a tight budget, it can be very discouraging to see what everyone else is up to on social media.

 But you have no idea how much debt they have. They may be thousands of dollars in debt, for all you know. So, unless you know precisely what is going on in someone’s money, making comparisons is pointless.

Track Your Progress 

It’s amazing to see how much of a difference your payments are making as your loan amounts decrease. So figure out a means to see the fruits of your labour.

This can easily be done on a computer, but it might be more enjoyable to do it in a physical form. Make a little thermometer that you colour in as you approach closer to repaying the complete amount owed, or a paper chain that you remove a link from each time you pay off another $100. Some people have even built Lego towers that they remove one brick from each time they pay off a set amount of debt.

 Having the means to observe your progress might help you stay on track when it’s difficult to continue sacrificing.

 Have An End Date In Sight 

Based on your current repayment efforts, you should be able to gain an indication of how long it will take you to reach your debt payback targets. Keep track of the time remaining till you attain your goal.

 It’s simpler to keep to your goal if you remind yourself that your effort is just temporary. You’ll also grow more and more excited about making additional payments as you approach debt freedom. You may even be able to speed up the time it takes to complete your project, perhaps by using Cash Stop loans to reduce a high-interest credit card faster. 

 Focus On The Why

Most people have a good reason to try to get out of debt. You might want to pay off your loans so you can buy a house or retire early by putting more money into your 401(k) after you’ve paid everything off. 

Remember that you have to give up things to reach your goal, no matter what it is. You can even keep a picture of that goal in your wallet or on the desktop of your computer to help you remember. If you see your dream house or an old couple relaxing on the beach every time you’re tempted to spend, you’ll remember why it’s better to put your extra money toward paying off debt.

Spread the love