One of the hard truths about turning your financial life around, particularly if you don’t have a high income, is that financial progress feels really slow. You do make progress in the right direction, but there’s a lot of “three steps forward, two steps back” mentality and the steps forward are incredibly slow. You can make good financial choices for months and feel as though you’re barely making any forward progress on your goals.
There are a lot of reasons for this. Here are three big ones.
First, many financial goals are quite big compared to the resources available. If you’re trying to pay off debts that add up to a year’s worth of income or more, it’s going to be slow paying it off no matter what you do. If you owe $50,000 in debt and work really hard to free up an extra $100 a month, you’ll get rid of that debt faster, no doubt, but the reality is that you’re only cutting away 0.2% more of that balance each month. It’s like chipping away at a boulder and knocking off pebbles with each swing.
Second, our forward progress is often hindered even further by unexpected events. It’s the whole “three steps forward, two steps back” problem. You nail everything for a couple of months, then your car breaks down or a bill you forgot about arrives in the mail, undoing a lot of your progress and leaving you feeling like you’re back at square one. It’s hard to feel like you’re making much progress when you’re taking almost as many steps back as you’re taking forward.
Third, even for people with a lot of income, financial success is achieved on a timescale of years and decades rather than weeks and months. People often want to feel success in a matter of weeks, but unless you have a huge income, you’re not going to feel a big financial change quickly. It takes months and years to fix financial issues for the vast majority of us. Our brains aren’t really wired to view our personal lives in that kind of timescale. Most of the time, we’re fixated on the next few days or the next week, not three years from now. That distance can feel like forever.
It’s no wonder that progress feels slow. It’s not uncommon for someone to have a big goal of paying off a $100,000 debt, but you can only cut $200 a month from your spending, no big leaps forward in your career are coming any time soon, and after three months you’re hit with a $500 unexpected bill. It can feel hopeless.
I won’t lie: financial progress is a long road. There’s no magic recipe that’s going to pay off your six-figure debt on an average salary in six months. That’s just reality.
So what can you do to break out of this feeling? Here are some strategies that have worked really well for me over the years.
Imagine what things would be like if you hadn’t been making good financial choices recently.
You make good financial decisions for three months, then you’re suddenly hit with a big unexpected bill, which gobbles up all of the money you accumulated over those three months. You’re back where you started, or you might even be behind where you were when you started. It all feels miserable and hopeless.
If you feel that way, ask yourself one simple question: where would you be right now if you hadn’t been making good financial moves recently? Let’s say you were able to save $300 a month for three months, then you were hit with a $900 bill. Yeah, you’re back where you started, but where would you be if you hadn’t saved that $900? Rather than being back where you started, you’d be $900 behind.
That’s progress. Good progress. That’s the kind of progress that isn’t glamorous at all, but it’s the kind of progress that is life-changing over time. Yes, that big step back stings, but if you weren’t taking steps forward all the way along, that big step back would take you into a very bad place.
Look at your financial state compared to a year or a quarter ago.
One of my favorite things to do is to take a monthly snapshot of my financial state. I’ll add up the value of all of our assets, subtract all of our debts (basically zero, because I usually pay off our credit cards in full just before doing this), and that remaining total is our net worth.
Why do I do this every month? It’s simple: I love comparing my state right now to how things were a year ago — or a decade ago. It reminds me that all of these little steps are really adding up to something big. It reminds me that my financial state today is better than it was a year ago and far better than it was a decade ago.
That glance into the past reminds me that all of those little choices are worth it, that it’s building into something life-changing.
Fill in a big piece of graph paper.
If you’re focused on a specific big goal, like paying off a debt, a really good way to visualize it and see your progress is to record it on a piece of graph paper.
Take a piece of graph paper and along the top write what your big goal is. Then, make a giant rectangle that fills up most of the rest of the page, containing many, many small squares on the graph paper. Figure out how many squares are in the rectangle by multiplying the length and the width. Then, take the total balance of your goal and divide it by the number of squares, and write that number somewhere on the sheet.
Each time you move toward your goal by that many dollars, fill in a square on the sheet. For example, if you have a goal of paying off $80,000 in debt, and your big rectangle is 80 by 100 squares, that means you have 800 squares to fill and each one represents $100 ($80,000 divided by 800 is $100). Whenever you move $100 toward your goal -—your total debt goes down by $100, or you have $100 more in your account — fill in a square on that sheet.
This serves as a nice visual reminder of your goal. The practice of filling in a square makes the progress toward your goal feel a lot more tangible than just watching numbers changes on your bills. It also creates a pretty sweet visual record, too.
You don’t have to color everything in using the same color or row by row or column by column, either. Color things in using Tetris pieces of different colors, or fill them in randomly like colorful stars in the sky. Do it however you like.
Focus on daily routines, not big numbers.
Many big goals that people have are actually best handled by having a daily system of routines and habits that guide you toward your big goal. If you set up a daily routine that constitutes a small step toward your goal and you stick to that routine every single day, then the goal becomes inevitable and all you have to really focus on is achieving that daily step. It turns the focus from the big goal to today.
Rather than worrying about your progress toward your goal, instead focus on whether or not you took the steps you need to do today. One great method for this is to get a wall calendar and put a giant X on each day when you achieve your daily steps. Soon, you’ll have a chain of those steps, that chain will feel really good, and you won’t want to break it.
What kind of daily routine lends itself to financial progress?
“Today, I won’t spend any money on anything frivolous outside of my pocket money (which I budget for each month).”
“Today, I won’t consume or buy any soda/junk food/alcohol.”
“Today, I will buy only generic brand household products and pantry staples.”
“Today, I won’t eat food prepared outside of my home unless I’m eating with a close friend.”
Figure out a few rules that point you in the right direction, one day at a time, and focus on achieving those things each and every day. Mark them with a big fat X on your calendar and watch that chain of Xs get bigger and bigger. Your progress toward that big goal will start happening automatically while you don’t even notice it.
Take on projects that will accelerate your progress.
This is another useful way to change your focus from the slow progress toward your goal toward something else while still moving toward that goal. Just figure out a smaller project that, if successful, will help you move a little faster toward your big goal.
For example, you might choose a side project that involves, say, selling off the 50% of your possessions that you use the least, or perhaps you might have a side project that involves getting a professional certification that will net you a small raise at work. Maybe your side project is to read one book a week from the library for a year — that’s a great goal that will cost you nothing but can fill up your hobby time and perhaps improve you in other ways.
As long as you’re focused on a secondary goal that will result in net financial improvement in your life if you succeed at it, you’ll find that progress toward your big primary goal comes naturally. You might be focused on selling off 50% of your possessions, but when you’re done with that goal you’ll discover you have a lot of cash in hand that you didn’t expect. You might be focused on reading books from the library but when you’ve achieved it you’ll find you’ve spent a lot less on hobbies this year and you’ll have more money in hand that you expected.
Reflect frequently on why you’re doing this.
Personally, I find this to be incredibly powerful, and it’s a technique I use all the time for various self-improvement projects. Why am I doing this? What is it that I’m hoping to achieve?
For me, it usually centers around a clear picture of what I want my life to be like in a year, or five years, or 10 years. Whenever I feel like a goal is too much work, that my progress toward the goal is too slow or I feel some other type of frustration, I sit down and think about why I’m working toward this goal and what that vision of my future is like.
For a financial goal, for example, I might think about no longer being stressed out about money and no longer having debt bills coming in the mail, or I might think about retiring while my wife and I are still relatively young so that we can spend our time on other life goals.
The more detailed those pictures of the future, the more inspirational they are to me, and the more drawn I feel to stick with my big goals, even if they’re going slowly.
Integrate a few “sprints” into the goal.
If you feel like your progress toward your big goal is going slowly, try “sprinting” toward that big goal for a short period. Set yourself up with a 30-day challenge that will accelerate your progress for a short time.
Perhaps you can give yourself a 30-day challenge of not eating out at all, nudging yourself into cooking more at home so it becomes a more natural choice. Try a 30-day challenge of not spending any money on entertainment, so that you explore some free options. Give yourself a 30-day challenge of going without cable/satellite, so you can figure out whether or not you can easily cut it out of your life. Maybe give yourself a challenge of filling a big box of stuff to get rid of, then selling off the contents of that box to accelerate your savings.
You can throw yourself wholeheartedly into these sprints and let them absorb your focus for a while, and then when you finish up and apply the results of that sprint to your big goal, you will have taken a larger step forward.
Look at a big change to turbocharge the goal.
Another approach that works well for kickstarting a big goal is to look at a big single change in your life and executing it. If you make a big change, one that either produces a big single burst of money or causes a significant cut in your bills, you can drastically increase your rate of progress toward your big goal.
For example, you might consider moving into a less expensive apartment or home. You might consider getting rid of a car and using mass transit, cycling or your feet for commuting. You might consider dropping your cable or satellite service. You might consider shopping around for all of your insurance packages and bundling them to get a far cheaper rate.
All of those changes will result in a serious decline in your monthly bills, an enormous burst of cash or both. In either case, your progress toward your big goal will start zipping along a lot faster!
A long journey takes a long time, and that’s okay.
In the end, nothing can really escape the fact that it takes a while to achieve anything worth achieving. If personal finance success were easy, we wouldn’t live in a situation where four in five adult Americans live paycheck to paycheck, and there would be no personal finance section at the bookstore or the library and The Simple Dollar wouldn’t exist. The ideas might be simple, but they’re not easy to execute.
Personal finance success needs patience above all else. The above strategies can simply help you make the journey more palatable.