Big financial goals can feel completely overwhelming.
You want to buy a house but the mortgage will be more than you make in three years.
You want to save for retirement but you need… a million dollars for the kind of retirement you want?
You want to pay off your student loan debts, but you’re making $28,000 a year and you owe well into the six figures.
It can feel completely overwhelming. I should know – I’ve been there. When I first sat down and seriously looked at our debt situation, which consisted of two car loans, a big pile of student loans, big credit card bills, and some other debts to boot, I felt just completely overwhelmed by it at first. The total debt was more than our combined annual income at the time and it just seemed like an impossible hole to climb out of.
Within just a couple of years, we were debt free.
When our second child was on the way, we decided to move out of our apartment and into a family home. When we started looking at houses, we were struck by the fact that even a modest starter home had a mortgage that added up to a multiple of our family income. It was really intimidating.
Four years later, we completely owned a 2,000 square foot family home with no mortgage.
Sometimes, I look ahead at our goal of financial independence and feel similarly, though less intense. We’re already a good way along the path to that goal, but we’ve got a long way to go.
In all of those situations, I feel overwhelmed by the huge number we’re aiming for and the amount of time it’s going to take to get there. I sometimes feel like we’ll never get there. I feel like even if we do get there, our life will have changed so much that it will have felt like a waste of time. I sometimes feel like I’m giving up things I don’t want to give up in the here and now just to chase that big goal.
Those aren’t positive feelings. Those are feelings that will lead me to give up on the goal before I ever get there. Feeling overwhelmed, feeling hopeless… it’s not a road to success.
I was only able to achieve big financial goals by overcoming that feeling of being overwhelmed by the size of the goal. I used a number of strategies to do this, strategies I continue to use to this day. Let’s look at them.
Strategy #1 – Focus on the Molehill, Not the Mountain
The most profound tool I’ve discovered in figuring out how not to be overwhelmed by giant goals is to simply focus on today rather than the big goal. Look at the mountain, not the molehill.
This is essentially the core of a strategy I wrote about earlier this week (Strategies for Translating Long Term Financial Goals Into Immediate Actions and Habits). The crux of that article is that most big financial goals can best be achieved by breaking them down into what actions you can take today to succeed and focusing solely on those. If you make those actions and new habits simple and just keep at it, day after day, you’ll get there eventually.
The problem is that, on its own, that strategy isn’t quite enough to undo the sense that the goal is overwhelming. You might have a specific goal for today, but it doesn’t take that goal out of the looming shadow of the giant goal.
For me, what really made the difference is truly believing and understanding that if I succeed in this little goal today, then the big goal is an inevitable conclusion. It will happen. It’s not a matter of if. If I achieve this little thing today, then the big result I want will occur.
All I need to do is chain together these little activities, and the key link in that chain is today, because without today, that chain doesn’t work.
If I want to achieve my giant financial goal, all I have to do today is one little frugal activity and stick to my monthly budget, particularly in the non-essential spending areas. That’s it. That’s all I have to do. I can prove it to myself by simply doing the math – if I do that today (and each subsequent day), I will achieve my big financial goal.
For me, I found that if I reiterate that sentiment to myself every day, my focus gradually shifts to today’s molehill rather than tomorrow’s mountain. What really matters is overcoming that little thing I need to do today, not the seemingly insurmountable mountain, because I know that if I nail that thing I need to do today, the giant mountain will take care of itself.
Focus on the molehill and the mountain will take care of itself.
Strategy #2 – Automate As Much As You Can
As I noted in the previous strategy, one big part of being able to grind down a large goal is to make sure that you’re taking daily steps that move you toward that goal. However, one of the big challenges of taking daily steps is that they require action every single day, and that can be hard due to the unpredictability of everyday life.
There are days when I don’t exercise much because other things come up, regardless of how important I view long term health goals to be. There are days when I end up spending more on food than I expected to because an old friend showed up. You can certainly strive to make a step forward each day, but sometimes things don’t go as you want them to.
One effective way around that is to automate your positive financial moves. One of the big advantages of making financial progress is that moving money from one account to another can be fully automated. You don’t actually have to take action to move money into your emergency fund or into your retirement account. You don’t actually have to take action to make an extra payment on your credit card. You can just automate all of it.
What automation does is that it sets a financial goal on a path of inevitability. If you’re automatically contributing $500 a month to your Roth IRA and another $1,000 a month to your 401(k), your early retirement plans are inevitable. You can simply sit back and just hold onto your job and you will get there. If you’re automatically making an extra student loan payment of $300 a month, paying off that debt early is inevitable. You just have to sit back and take care of the rest of your life.
For me, the part that really clicks about the automated approach is that it turns day-to-day activities and choices into an accelerant rather than a requirement, and that actually motivates me quite a lot. I know that Sarah and I will reach financial independence at roughly the time our youngest son graduates… but we could get there even sooner if I do a little more. Knowing that takes the pressure off of a daily choice – I don’t have to do X to make this happen – but instead it turns that daily choice into an accelerant – if I do X, my progress toward that inevitable goal speeds up.
Knowing that a goal is on autopilot, that I’m going to achieve it just by twiddling my thumbs, is incredibly empowering. It makes a goal feel much more real and much more within reach, even if the automatic process will take years. Then, knowing that my daily choices can actually speed it up makes those daily choices more interesting. It’s like making the choice to go on a long car trip – once you’ve made that choice, it doesn’t feel overwhelming any more and you find that stepping on the gas a little brings you to that destination a little faster.
Strategy #3 – Aim to Establish Good Habits and Normal Routines
A big goal requires sustained effort over a long time. You can’t just wake up one day and decide, “Today, I’m going to pay off all of my debts that I’ve accumulated over the last ten years.” Even if you were somehow able to do this, without some sort of lasting change, you’d eventually find yourself right back where you started with a bunch of accumulated debts.
That’s why any major financial goal – or goal of any kind – rests on the back of new habits and normal routines that are meant to be lifelong changes. Automation is a powerful tool, but it still means you have to learn how to live by spending less. Individual actions are powerful, too, but if they’re not sustained, you’re going to roll right back to the situation you were in to begin with.
If you’re currently spending everything you make and want to adopt a financial goal that’s going to require $300 a month, you have to figure out changes in your way of living that free up $300 a month going forward.
Some of that money can be found through singular actions – the so-called “big wins.” Cutting your cable. Renegotiating your cell phone bill. Shopping around for cheaper insurance. Moving to a smaller residence. Those big actions can certainly cut your regular bills substantially and can make up a large portion of what you need to achieve your goal.
At the same time, there is also much value to be found in the small steps, the minor tweaks to one’s routine that result in small savings but are repeated so often that they become routine and those little savings add up over time to big ones. Making cold brew coffee instead of stopping at Starbucks. Keeping your thermostat a little lower. Walking or taking mass transit to work. Buying store brands at the store. Using the library instead of the bookstore. Eating at home more often instead of eating out.
Those little tweaks seem like a challenge at first, but when you take them on each day, they eventually turn into habit and become your new normal. Making cold brew coffee at home might seem like a new task on your shoulders every day, but give it a few months and it seems completely normal and you wonder why you ever went to a coffee shop every day. Taking the train to work might seem like a huge alteration of the routine, but do it for a few months and it seems like the sensible and normal way to do things. Buying store brands might feel weird the first time you load your cart up with them, but in a few months, they’ll seem like the normal way to shop.
The trick is to keep at those new routines until they feel completely normal or until you discover something fundamentally wrong with them and discard them. My strategy is to do a lot of “thirty day challenges.” Each month, I’m usually doing three or four such challenges, where the goal is to either (a) give a thirty day trial run to something new and then evaluate whether it works for me at the end of the month or (b) keep up with a previous thirty day challenge until it feels completely routine and thus a normal part of my life (and so a thirty day challenge is redundant).
I find that reviewing those routines and habits I’m working on each day is really, really useful. I just spend a couple of minutes before bed looking at a list of routines and habits I’m working on and asking myself seriously if I did my best today to move forward on that thing. I give myself a score of 1 to 10 based on effort. I find that I really want to give myself a lot of 10s each day and that becomes a subtle motivation to put forth more effort.
Strategy #4 – Surround Yourself with Support
Often, people think of this idea as meaning that you have a bunch of friends who are actively cheering you on as you try to achieve something. That can be useful at times when you need to exert a ton of effort in a short time, like running a marathon. However, such support really can’t be sustained over the long time period that a major goal requires.
Rather, I find that friendships and relationships that offer indirect support for the direction you’re heading in are what you truly need to succeed over the long term.
If your friends seem to need to spend money every time you see them, they’re not going to provide long term support for your financial goals. If your friends seem to struggle to keep their bills paid and aren’t saving for retirement and aren’t making progress toward their big goals in life, they’re not going to provide long term support for your financial goals. Rather, they’re going to distract you from those goals. They’re going to tempt you to spend money for things – social occasions, companionship – that you shouldn’t have to spend money for. They’re going to nudge you to spend money on more and more stuff just to keep up with them.
Rather, seek out friends who do the opposite and accentuate those friendships. Look for friends that don’t struggle to keep their bills paid and seem to be making progress toward financial goals. Look for friends that don’t encourage you to spend money, that don’t engage in “retail therapy,” that don’t suggest expensive things to do together constantly, that do suggest free or super-cheap things to do together. Look for friends that talk about long term goals rather than the latest thing they just bought. Look for them throughout your life and intentionally cultivate those relationships.
What you’ll find is that the more people you have in your life that are dedicated to that kind of financial progress and the fewer people you have in your life that are focused on living paycheck to paycheck and not working on financial goals, the easier it’ll be to make financial progress. You’re surrounded by people who aren’t encouraging you to spend and are likely to talk about their own progress, offer suggestions to you, and subtly encourage your own financial goals.
It’s the same with any area of life where you have big goals. If you want to lose weight, spending time with fit people who pay attention to their diet will help. If you want to succeed in your studies, surrounding yourself with people who study and focus on academic performance will help.
Strategy #5 – Love What You Do Each Day
People often view a life of financial restraint as being miserable on a day to day basis. Their first visions of that life almost always centering around cutting out their absolute favorite things that they spend money on, whatever that might be. If people like eating out, they imagine sitting at home and eating dry cereal or something. If people like indulging in a particular hobby, they imagine themselves watching paint dry instead of “having fun.” We tend to make the most awful substitutions imaginable when thinking about altering our daily routine.
The thing is, most financially sensible changes are largely transparent. You’re not really going to notice things like buying store brands or switching to a more economical insurance provider or cutting out a subscription that you rarely use. Most of the moves that you make are going to have little impact on your daily life.
What about the ones that do have an impact? For me, the rule is simple: if a change actually makes me feel worse about my daily life (after considering the financial benefit), I undo that change. I don’t stick with it. Rather, I’m constantly trying new things that are free and/or low cost while also retaining the things that I enjoy doing. What I wind up with is a life with more things that I want to do that have very little cost than I have time for. In that scenario, why would I choose things that cost a lot of money when I already have things I’m itching to do that don’t cost money?
My suggestion is this: if you’re afraid of a boring life, don’t just cut the things you enjoy doing from your life. Rather, decide to spend just some of the time you would otherwise devote to expensive things on free or low cost things you’ve never tried before but been a little curious about. Don’t worry about what other people think. Try hiking. Try geocaching. Try cooking at home. Try making sauerkraut. Try running for political office. Try checking out an interesting book from the library. Just try lots of things, everything that sounds remotely interesting, and then stick with the things that are enjoyable.
If you take that approach, walking away from a costly thing you enjoy feels less like a punishment and more like a benefit. Furthermore, you begin to naturally put your life on track for financial success because you’re spending less along the way.
Your life should never consist of boredom and misery. If living a financially responsible life feels like that to you, you’re doing it wrong. Rather, you should be trying lots of low cost things all the time and keeping what sticks, and you’ll find that along the way the best of those new low cost things end up replacing expensive things in your life that you thought you couldn’t live without. This is the single best strategy I’ve found for beating the financial doldrums.
The five strategies here really boil down to one thing: for a big financial goal to feel easily attainable, you need to chart a daily course in the direction of that goal. Your natural day to day life needs to be leading toward that goal. If you can make that happen, then the biggest of financial goals will eventually be achieved. If you refuse to change your direction, you’ll never reach that new destination.
The thing is, that new direction doesn’t have to be miserable. It can be enjoyable and interesting, with new people and new things in your life. You don’t have to drop the things you really care about, either. You just have to be willing to try new things with an open mind and explore new social connections with an open heart.