The path to financial independence is a long and winding road that includes potholes, detours, and rush hour traffic. That doesn’t mean it isn’t a journey worth taking, but it can revert us back to our bored and exhausted nine-year-old selves who ask, “Are we there yet?!?!” I often hear questions related to how to stay motivated to save money on a budget and on your journey to financial freedom. We recently tackled this topic in a finance AMA event and decided it was a great topic to tackle in more depth here.
Everyone wants the freedom financial independence affords, but often people struggle to find the discipline to stay focused and make the money decisions that lead to that magical “you have reached your destination” moment. So below, we cover what’s helped us along the way.
It all starts with your budget
Bet you could guess we’d start here, but it’s always worth repeating. So often, people focus on the investing side of FIRE (financial independence retire early) and forget that spending is a large factor in determining their FI number. And just like it’s hard to find Little Jerusalem Badlands State Park off the back country roads in Kansas without a map, it’s hard to get to the end of your money journey without, well, telling your money where to go. Your money needs a road map, and that’s your budget.
A budget can help you prioritize wherever you are on the FIRE ladder, whether you’re saving up an emergency fund, paying off debt, or investing like crazy to catch up to retirement.
Your budget also helps you align your spending with your values, which is another great motivator. It gives you permission to enjoy what you love in life now, while still planning and saving for the future. Contentment in your everyday life is a huge motivator for wanting to stick around (and on an investing plans) for a whole bunch of tomorrows.
Clear eyes, full hearts, can’t lose. Let your goal and your budget help lead you to state.
Automate your savings like an autopay bill
This is one of the big financial hacks we wish we’d learned earlier in our FIRE journey, but it’s never too late to automate!
The bummer truth is that building wealth and setting yourself up for a life of financial freedom usually isn’t sexy or exciting. When done right, it’s typically mundane and repetitive and similar to a long, boring road trip. Cue the “Are we there yet?” again.
While it’s hard to gussy up your retirement savings plan (and usually unwise of you try to get fancy with crypto or day trading), you can at least stave off the boredom by setting your savings up as an autopay. The easiest way to do this is to invest in an offered 401(k) or other employer-sponsored plan at work. This can work for an HSA too. Taking your retirement out first before you bring your paycheck home is a great way to stay motivated because you don’t even have to think about it. Plus, it’s hard to spend that money on something else when it hits retirement before you see it.
If you’re investing in other types of accounts, such as a Roth IRA, traditional IRA or a brokerage account, you can usually schedule auto drafts from your bank account as well. Each month, we have $500 withdrawn on the 15th that gets auto invested into our IRAs into the funds we’ve selected as part of our asset allocation. Since we know this money is coming out no matter what, it’s in the budget.
Learn more about types of tax-advantaged retirement accounts for investing.
This helps us stay motivated because we don’t have to think about it. To us, investing is like a bill payable to our future selves.
This works when you’re on the earlier rungs of the FIRE ladder as well and are saving up for an emergency fund or tackling your dumpster fire debt. Using your budget, you can figure out how much extra you can easily save or pay a month and then automate that payment to either yourself or others. (Most banks let you set up reoccurring transfers.) If you have leftover money at the end of the month, you can always throw an extra payment in to accelerate the process, but this can help you get into the new rhythm, which makes it much easier to stay motivated to save.
Both our budget and our investing plan are honestly so routine now that we don’t really think about them as something we have to do. At this point, they’re employees working for us in the background.
Break your goal into micro goals to help track progress
The very first rung of our FIRE ladder is to set a goal. After all, it’s hard to stay motivated when you aren’t working toward something. And don’t be vague like “I want to retire.” Create a concrete vision for what that looks like, such as, “I want to buy a camper and save enough for a retirement income of $60,000 so I can travel the country visiting family and friends.” Or “I want to pay off all $27,354.74 of my credit card debt so I don’t have to worry about stretching my paycheck to make ends meet every month.”
Once you have a goal, break it down! Saving for retirement can take decades. Paying off debts can take years. It can be hard to stay motivated for one goal that long, so don’t let it be just one goal. Let it be a series of goals, just like the FIRE ladder.
Take paying off debt for example. The debt avalanche and debt snowball methods are two methods used to take one big goal and break it down into micro goals. Both are ways to help stay motivated on the journey.
Our goal is to be financially independent in five years so that we’re working because we WANT to, not because we have to. This equates to drawing down $70,000 a year out of savings. Squirreling away enough money to make that a reality is overwhelming as a single step and usually feels impossible. So we’ve broken it up into several stages:
- Get out of all consumer debt ✔️
- Max out our Roth IRAs annually (set on autopay) ✔️
- Max out our HSA contributions each year (set on autopay) ✔️
- Pay off the house ✔️
- Save 50% of our income (work in progress)
And even these steps we’ve often broken down. For instance, we set micro goals while paying down the mortgage. And as part of our goal to save 50% of our income, we first set a goal to save 25% into our tax-advantaged retirement accounts. ✔️
Track your progress
How did we know we’d reached our goal of saving 25% of our income or how much we had left on the mortgage? We tracked our progress to stay motivated and focused on our money goals.
When we were paying off the house, I updated our mortgage spreadsheet at the end of each month, which showed us not just how much we had left to reach our goal, but also how much progress we made with each payment. Honestly, it became almost addicting to see how much we were saving in interest over the life of our 30-year mortgage by knocking it out.
I’m a visual person who retains things by writing them down, so we also had a payoff tracker on the fridge. Each payment we made, we got to mark off another thousand (or two) on the sheet. And since we love Arrested Development, we channeled our inner Gob Bluth and did a final countdown.
Just be careful of tracking too often. While it’s important to stay on top of your budget every month, keeping tabs on your investing every month is more likely to disincentivize you than push you along. Compound interest takes time to grow your investments. A lot of time. It can feel like you’re Romilly stuck on the Endurance for as long as Brand and Cooper are down on the surface of that weird water planet in Interstellar. If you look out the porthole every five minutes waiting for their return, it’ll feel like they’ve abandoned you on the float in space, alone, forever. When it comes to tracking retirement investing, stick with checking progress once or twice a year, not once or twice a week.
Celebrate the milestones along the way
Another key to stay motivated for the long haul is to not just track but celebrate your progress along the way. When you hit one of your micro goals, celebrate! It doesn’t have to be a huge splurge that costs a lot and sets you back on your savings. It can be a simple special dinner or watching your favorite movie. Or throw a confetti party if that’s your style.
Be creative and frugal when needed, but don’t forget to pause and appreciate that holy shit, you’ve come a long way! Look at how much you’ve accomplished already. No more credit card debt for you. You’re done with student loans FOREVER! You officially have a positive net worth. Time for some margaritas by the pool.
Gamify your goals
I’m competitive. So competitive in fact that it’s the only thing that finally convinced me to be less risk averse with my investing strategy.
So to stay motivated, especially early in the process when we were getting into a new rhythm with our money, we turned it into a competition. Who can spend the least of their fun money this month? Who can make it the entire month without eating out?
While we don’t recommend pitting spouses against each other when it comes to your money strategy, find ways to make it entertaining, using whatever means motivate you in other aspects of your life.
Plug into the FIRE community
When we were in the slog of paying off the house, we listened to a LOT of Dave Ramsey and the Ramsey Show podcast. I loved listening to debt free screams, especially ones where they paid off their house. If this other random couple who makes $150,000 a year can pay off their house, we could do it too.
Once we paid off the house, we pivoted to the Money Guy podcast to inspire us to really focus on our investing strategy. And I’ll admit, on days when I’m feeling down and need a pick me up, I’ll watch part of an episode of Financial Audit with Caleb Hammer just to get some perspective.
There are a ton of great podcasts and YouTube channels out there to help educate and inspire. (We hope The Budget Brigade helps too!) If you need more ideas of podcasts, check out our friends over at Catching Up to FI and Finding Financial Freedom with The Frugal Physician.
Talk about your journey with others
Don’t just sit on the sidelines of the FIRE community, focused on providing high quality H2O to all the football players–get in the game, Bobby Boucher! Join communities and groups, whether they are in-person meet ups or virtual communities, like The Budget Brigade budgeting and personal finance group.
Connecting with others who have similar goals is a great way to stay motivated. Fun fact: science shows you’re heavily influenced by the people you associate with. So if you’re partying down with the YOLOers every weekend who are broke as joke, chances are you’ll keep pace with them. If you want to become financially free, hang out with people who already are! Again, there’s no better way to stay motivated than to see it IS possible, especially for people who are in similar situations to you.
We also recommend on your climb up the FIRE ladder to get an accountability buddy who can help motivate you to keep reaching for that next rung. It can be a spouse, a sibling, a child, a friend–it doesn’t matter who, so long as you have one who can help cheerlead you to win state, state, state!
Fully commit to the process and your goals
It’s hard to stay motivated to win the big championship if you only go to half the practices and miss every other game of the season. Grit and determination build motivation, so stick with it!
You accomplish what you focus your time and energy on, so make your goal a priority. Take the time to learn about investing. Spend the time putting together a baller budget.
The more you stick with it, the more it becomes a habit and the new normal. And when something is the norm, you often need a lot less motivation to stay on track because it becomes the default in your day-to-day life.
If you do all the steps above and make sure you’re aligning your actions and spending today with your vision for the future, you’ll likely find you’re living your best life. “Normal,” as is often perceived as Keepings Up with the Joneses, loses its appeal. You’ll want to continue living this amazing life you’re building for yourself.
Think of it like starting to exercise for the first time. I HATED going to the gym. The treadmill seemed like a boring waste of 30 minutes. Yoga was so slow–I have six million other things more “productive” I could do with my time. But I knew I wanted a healthier life, so I set a goal (treadmill and yoga five times a week), and got an accountability buddy to go with (AKA my husband) to keep me motivated. I still don’t like going, but I’m sticking with it as I set my new normal. And while it isn’t always fun, I always feel better when I’m done. I’m building in strength conditioning so I can tackle 14ers next year, and when I’m done with my squat sets, I’m so pumped I could go all Rocky or Creed on someone with the endorphin rush. Totally worth it.
The final word
You’ve got this, amigo! Go out there and kick your money goal’s ass. No one is going to come into your house and tell you what you can’t do anymore–not even you! Your accountability buddy is going to shut that negative self talk right down.
One final piece of advice for your road trip (we aren’t there yet, but you’re getting closer!): always remember your why along the way.
Never have money goals for the sake of just having money. What does financial freedom really look like to you? What do you hope to do with the next few decades of your life? That’s the ultimate motivator.
I’m working hard because momma wants her camper for her epic cross county National Park adventure. Lamar Valley wolves, here I come!!!
Put your goals on your fridge, your mirror, make a vision board, post them in a finance community chat–whatever keeps you going. Do not go gentle into that good night. Rage, rage against the dying of the light.
Now excuse me while I go rewatch Interstellar to celebrate my micro goal of finishing this article.