When you’re working that debt snowball or building your emergency fund, you have a pretty clear focus on where your “extra” money is going. It can take awhile to complete those things. A long while.
When we get that inevitable “Oh, let’s just forget about our debt snowball and do something fun” it’s probably a great time to remind ourselves why we’re doing what we’re doing.
Look ahead to the future and picture your debt-free life. By that point, your money will be able to do more things you want it to do. Imagine some things you’d like to do for yourself and your family at that point.
For Karen, she hopes to someday upgrade her furniture and save for a house. When she and her hubby have their debts paid, they’ll have the funds to do those things.
Thinking about the future can help us stay focused on our present tasks. We might be more motivated to keep our spending low and our debt snowball high, knowing that we won’t always have to deal with debt.
It’s important to stay positive about what the future will bring, and not get upset on your current situation. Sure, it’s not as fun to pay money to loans when you’d rather use your money somewhere else. But be patient — the debts will be paid, if you stay the course.
As for my husband and I, we’ve talked a little bit about what we want to do with our “extra” money.
To remind ya, we’re working on paying off our car early, with the hopes of it being paid off by the end of 2009 at the latest.
But, we have other goals we want to work toward as well. We haven’t decided if we’ll do a snowball approach and throw every extra cent at the car loan, or if we’ll just make double payments and put leftover funds toward other things, including increasing our retirement contributions, saving 20% to put down on a house, starting a college savings account for our son, better furniture, and travel.
So many fun things to think about! I just need to remind myself how far we’ve come in the last year, and that makes me realize that hey, we can achieve all of these goals, too.
When I think of it in terms of “Oh my goodness, how can we ever save $25,000 to put toward a house?” I need to remember a few things. Yes, that’s a lot of money for us. Yes, it will take us awhile. BUT. When we’re finally debt-free, we’ll have more money each month that we can put toward savings.
Just think about how much you’re sending toward your debts each month. Add up minimum payments, and for good measure, throw in how much extra you’re usually able to send to debt repayment. Now, think about how far that same amount will go if you just use it for savings (or whatever your goals are). Wow.
That $25k suddenly seems more doable to me.
What about you? What do you want to do once you’re out of debt and have your emergency fund in place? Or, if you’re already past those steps, what are you doing? Any words of wisdom to share?