If your New Year’s resolutions leave you feeling burnt out, check in with these tips to stoke the fires of motivation.
Ever get the feeling you’re spinning your wheels, working hard but going nowhere? It’s okay — even the most driven people in the world get stuck in neutral.
Sometimes, the feeling hits when you’re facing one too many unexpected emergencies. If another one arrives when your savings are low, it may be time to learn about the process of getting a line of credit. Kick-starting this process may help you cover an unexpected emergency when you’re feeling discouraged.
If this happens to you, the results may get in the way of your financial goals. That New Year’s resolution you started with so much enthusiasm may now be an annoying chore on par with doing the dishes.
Sure, you know it’s something you would benefit from doing, but you may not be excited about it. You might even put off starting to work on your goal as long as possible. And like a growing tower of dishes, the list of things you need to do to achieve your financial goals gets bigger the longer you wait to roll up your sleeves and get started.
It’s enough to make you want to throw in the towel and wait until next year to try again. But don’t give up! Whether you’re reading this at the start of a new year or mid-way through it, here’s some advice to fan the flames of motivation.
The Importance of Practical Goal Setting
Where you set the bar may impact the chances that you’ll achieve your short and long-term financial goals. If the bar is set too high, you may be discouraged by the sheer amount of work needed to reach your goal.
But if you set the bar too low, you may not feel a genuine motivation to accomplish it. Results from a review of various studies showed that setting specific and sufficiently challenging goals led to higher performance in 90 percent of the studies.
So how does this work in practice?
If one of your long-term financial goals is to pay off your debt in a few months, this may be challenging and depends largely on how much debt you have, among other factors.
The average U.S. household has an average of $136,355 in debt across revolving credit, mortgages, auto loans, and student loans. How do you compare?
And therein lies the problem with this kind of goal setting; paying off all your debt is too vague. Without a clear objective, it’s hard to know where to start.
Specifying your financial goals with details and attainable tasks will help make the insurmountable seem possible. Rather than saying all debt, focus on a particular bill — whether it’s paying off a line of credit or a credit card.
Let’s break this down even further:
- Find out what needs to change in your budget, so you can make more than the minimum payment each month.
- Keep tweaking it until you free up as much possible to pay off this bill without impacting your ability to pay other bills.
- Commit to this spending plan.
- Use a payment calculator to find out how long it will take to pay off your line of credit or credit card using these payments. And voilà — you have your “pay off date” – the date by which you should ideally be able to pay off this bill!
Now compare this list of objectives to “paying off all debt”. By clarifying what you want, you’ve set out smaller, easy-to-achieve steps that help take you from Point A to B.
Breaking your financial goals into smaller mini goals is an excellent way of distracting you from a goal that’s too challenging.
Celebrate the Little Things in Goal Setting
Your financial goal setting style usually falls into one of two camps.
- Damage Control: This first style involves a resolve to undo something less than ideal— like when you overspend during the holidays or use up all your emergency savings on a vacation.
- Preventative Measures: The second involves preparing for the future, so you have what you need — whether it’s saving cash you might need for a repair or building positive financial habits.
In either case, short and long-term financial goals aren’t fun. They forecast a lot of hard work in the road ahead. And depending on the goal, it may take a long time before you arrive at success.
Take adding positive credit entries into your credit report, for example. If you expect to see an impact on your history, you may be waiting a while. The timeline hinges on a lot of factors, some of which are outside your control.
If you have existing entries that are impacting your history negatively, you may have to wait for this data to expire before you see a meaningful change in your file. Bad entries hang around between seven and ten years, even if you add positive ones in the meantime.
If you find an error on your credit report, you’ll have to wait for the dispute process to go through — which may take longer than 45 days.
An error may point to a simple filing error, or it may indicate you’re a victim of identity theft.
If you suspect your personal information may be hijacked, be sure to read this post on identity theft. It shows how identity theft may impact your payment history, accounts owed, and length of history — all three very important factors FICO and VantageScore look at when generating your score.
All this is to say, it could be a long time before you achieve your goal. And waiting for delayed gratification is a skill few of us have.
Celebrating small steps along the way may help you stay focused on the bigger task ahead. It helps reinforce all your hard work is going towards something worthy.
So, take some time to indulge in a reward — within reason of course. Learn how to reward yourself without compromising your financial goals here.
This may be some well-deserved time off from following up on reporting agencies about the error on your file. Or it may be indulging in a sweet treat once you make the phone call to a reporting agency.
Make Consequences Real with a Commitment Contract
Goal setting is all about balance. If the previous tip is your carrot, this next one is your stick. You need to find something that properly motivates you not to fail.
Without a consequence of failure, not reaching your short and long-term financial goals may not seem so bad. Sure, you didn’t technically achieve what you set out to do. But you didn’t lose anything by missing the mark.
You’re simply back where you started. It may not be where you want to be, but at least it’s familiar.
Adding a consequence may light a fire that no reward can do. Knowing you face a consequence for failing will make you want to succeed!
A commitment contract makes these consequences real. It sets out a list of rules or tasks you must meet. If you don’t, you’ll face a consequence. Choose a penalty that you genuinely want to avoid, so you’re more likely to stick with your list.
This commitment contract doesn’t have to be as official as your line of credit agreement. But this document does provide a good example.
As a legally binding contract, your line of credit agreement clarifies your rights and obligations as a borrower. It guarantees how a financial institution delivers your funds, while binding you to your specific line of credit rates and terms.
Failure to meet these results in financial consequences. Missed payments may result in extra finance and interest charges. It may even impact your credit history if your financial institution reports these missed payments to a reporting agency.
Here at CreditFresh, we report all payment activity to TransUnion, one of the major credit agencies. To find out more, click here and explore what the CreditFresh Line of Credit by CBW Bank offers.
Your commitment contract harnesses the same structure to goal setting, even if it isn’t a legally binding contract. It outlines your obligations and makes clear the consequences if you don’t meet them.
When you’re the one to mete out rewards and punishments, it’s easy to talk your way out of a penalty. So how do you make these consequences stick?
Peer Pressure
Ask someone who has a handle on their finances if they’re willing to be your accountability partner. Let them know what you want to achieve, then set up times when they’ll check in on your progress.
Choosing someone who you respect is key here. Their opinion of you and your financial goals must matter.
The fear of letting them down may motivate you to keep chipping away at your short and long-term financial goals. Who knows, your friend may even become your very own cheerleader, encouraging you to work harder from the sidelines.
Commitment Apps
If the shame of disappointing loved ones doesn’t do it for you, look to these commitment contract apps:
These services turn goal setting into a competition with high stakes. You’ll have to put your money where your mouth is, betting a small amount of cash you’ll achieve your short and long financial term goals.
If you fail, you’re out however much you bet against yourself. It either goes to the app or a charity of your choice. But in either case, it means you lose out.
But if you win, that money stays in your pocket, keeping you richer.
Putting something as serious as money on the line is a powerful motivator — even if it’s just $21 as is the case with 21Habit.
Nevertheless, only use these services if your budget can handle the loss of your bet. You don’t want to make a bad thing worse if you promise money you can’t afford to lose.
Whatever You Do, Don’t Focus on Failure
Accountability is an important part of goal setting, but don’t let it take over. Focusing on what you didn’t accomplish may be what takes the wind out of your sails.
To be fair, it’s easy to see your financial goals as a black and white issue; either you achieved them or not.
But this all-or-nothing attitude is a dangerous mindset. It may leave you demoralized if you fail, which makes trying again a lot more challenging. It may trap you into defeatist thinking that turns you off of your short and long-term financial goals altogether.
Rather than beating yourself up over it, think about why it went wrong. You may be able to identify behavior, people, and events that steered you off course.
More importantly, you’ll know what you should fix for your next attempt. Focus on what you can change to make sure you don’t run into the same mistakes again.
But don’t be discouraged if you do; we all make mistakes, and we all lose motivation sometimes. What’s important is how you pick yourself up again.
How do you plan on staying driven? Any time you feel like your financial goals are getting of track, revisit these tips for inspiration. Whether it’s the start of a new year, the end of another, or somewhere in between, they’re here to help you kick your financial goals into high gear.
And if help looks like a personal line of credit, make finding the right product one of your short-term financial goals. We welcome you to contact CreditFresh today to find out more about what we do.
Disclaimer: This article provides general information only and does not constitute financial, legal or other professional advice. For full details, see CreditFresh’s Terms of Use.
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