Setting goals is easy.
We all do it all the time.
And often we set big and audacious goals that we would love to achieve … but it just might not be feasible. Or we’ll have to work really hard to get there.
Usually, we start out on a good path. We have those big goals, and we are determined to achieve them. So, we put in the work, and we strive toward them, no matter how hard it is.
But then time goes on.
And it feels like we aren’t getting any closer to our goals.
When you’re trying to pay off debt it can feel like that.
When the number is so big that it’s going to take months or even years to pay off … it feels like each small decision you make is just not worth it. After all, why would you bother denying yourself that snack you want when a few dollars isn’t going to make a big difference in the thousands of dollars you owe?
Or why wouldn’t you spend a little bit more for something special for yourself when it’s only going to add another month onto your plan anyway?
The key is having some form of motivation that can keep you going.
The Overall Motivation
Of course, your overall motivation is getting out of debt, right? You really want to reach that goal and you’re going to do everything that you can to get there.
You take a hard look at your financial situation, and you add up all of the numbers and you figure out what that big number is.
That big number, the sum of all of your debts put together, is the goal. And bringing that number down to 0 is what motivates you to keep trying.
But when your number is dropping by 5’s and 10’s … it doesn’t seem like much.
You need smaller motivations.
Building Your Way Up
Take a look at each of your individual debts instead.
Do you have several credit cards with a balance?
Or maybe you have loans with different balances on them.
Maybe you have a combination of both.
Maybe you have some other type of debt that needs to be paid.
Whatever it is, each of those separate debts has a separate number attached to it.
Altogether those are you full debt.
But individually they can seem less daunting.
If you have a credit card with a $1,000 debt on it that’s a whole lot less intimidating than several credit cards, put together with $10,000 of debt on them, right?
And those little decisions that you make day to day are going to make a much bigger difference on that $1,000 than on that $10,000.
That’s where your motivation comes in.
You absolutely want to think about the impact on your overall debt. But you also want to think about the impact on those smaller debts.
When you look at your goal as paying off debt you then break it down into smaller goals that are easier to manage. Those are the individual debts.
What Does it All Mean?
Let’s say you have 5 different accounts that you need to pay off.
The sum total of all of your debts is $10,000, divided between those 5 accounts. But they’re not all equal.
Maybe one of them has $500 on it. Another has $2,000. Another one has $5,000. Another has $1,000. And the last one has $1,500.
If you add them all up it seems like it’s going to take a long time and be hard to pay off that $10,000.
But what if you look at each debt individually.
How hard is it to pay off $500?
It wouldn’t be too bad, right? You could manage that in a much shorter period of time.
And once you paid off that $500 how would you feel?
Chances are you’re going to feel pretty good. You’re going to be proud of yourself for getting that far and for wiping out at least one portion of your credit card debt.
That’s going to give you more drive to pay off the next one, which is the $1,000 debt.
And when you pay off that second one, you’ll feel even better and even more motivated to pay off the next one.
The process continues on and on and before you know it you’ve actually paid off thousands of dollars and you’re getting further and further along on your overall goal.
By breaking it down you gave yourself a smaller goal that was easier to achieve. And that smaller goal was still an instrumental part of achieving the larger goal.
Is Feeling Good Enough?
Now, paying off those small debts and making headway on your goals is going to be good.
It’s going to feel good.
It’s going to give you motivation and drive to move forward and meet the next goal.
But is it enough?
That’s going to depend on you.
For some people, that kind of intrinsic motivation is absolutely enough. They feel good about what they’ve achieved and then they can just keep pushing forward.
But for others (myself included) it’s a bit harder.
I like to have something a little more … extrinsic for my goals.
This is where you need to think about what works for you. But you’re also going to need to be careful.
You don’t want to throw all of your goals out the window because you do something big and over-the-top to celebrate reaching one.
For my little one, the best reward for achieving a goal would be M&M's. He loves them. Absolutely loves them. In fact, that's what we used for potty training. He would get M&M's when he used the 'big kid potty.' (Yes, we used extrinsic rewards for potty training our child.)
For myself and my husband, we’ve decided that for each credit card we pay off we get to go out to dinner.
Now, this isn’t a formal, five course, meal. This is a nice dinner at a sit-down restaurant (but one where jeans and t-shirts are still perfectly acceptable).
We’ve already picked out the restaurant for the first payoff. And we have ideas for what ones we might go to as we pay off the other cards.
When we get to the point where that first card is paid off (which should happen next month) we’ll get to go out to dinner, enjoy a nice meal to celebrate, and get right back to our goals.
The reward is extrinsic, and it’s going to cost a little money, but it’s not so much money that we’re going to be entirely off the rails again. (And we’re going to pay for it with cash, not a credit card.)
What Works for You?
So, what works for you when you’re trying to find motivation? With intrinsic motivation and the feeling of a job well done really do it for you?
Or do you need something extrinsic that will help?
Maybe it’s not a nice meal for you. Maybe it’s a new book. Or a haircut. Or a spa day. Or a day out with your friends. Or any number of things.
And you can increase the reward as you get further and further along.
Maybe for your $500 credit card you get a new book. And then when you pay off the $1,000 credit card you get to go to a spa day. And then when you pay off all of your debt you get to go on a nice vacation (with cash, of course).
The key is to find rewards that will work for you. Rewards that you’re going to be excited about and that you will continue to strive for, even when things get hard.
Because even though you’re breaking your large goal into smaller, easier goals, they’re still going to get hard. They’re still going to take time and effort and willpower. And those rewards might just be the way that you push yourself on the days when it just seems like too much.
What kind of rewards are you setting for your small goals?
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