You’ve all heard the expression. “How do you eat an elephant? One bite at a time.”
If you’re thinking about how you can become financially independent, you’re obviously thinking long-term. Even though it can be done in only a few years, for most of us it will take a good bit longer, and the process can definitely become tedious over time. Long-term goals like FI require short-term planning, so that you can be sure you’re marching in the right direction.
Here are a few ideas that can help you enjoy your FI journey, because your elephant is going to take a few bites!
Get Some Momentum Going
There’s a reason many financial gurus will tell you to pay off your small debts first, no matter the interest rate. Psychologically speaking, you can gain some quick momentum by getting those things “off your plate” and help yourself to focus more on the long-term.
In the same way, consider setting other small goals for yourself on the road to FI, like “Bring my net worth to $100,000″ or “start a side-job that brings in $1,000/month”. Those may seem too small to some of you, but setting some achievable goals will really help you get a solid start.
For my wife and I, our first goal after we decided to move toward FI was to move into a smaller, more manageable home, which really shrunk our mortgage down and helped us manage expenses. Not a tremendous goal in and of itself, but it required some renovation work to make it happen, and we did it! Getting that quick win under our belt has helped us to forge ahead, as we see what kind of difference our new lifestyle is making.
Celebrate Small Victories
Sometimes the road feels long, and you feel like you’re only inching your way toward the next milestone. When you begin to feel this way, it’s time to plan a celebration!
Figure out what the next logical stop is on your journey, and plan a way to incentivize yourself to get there. For some of you that means a trip to the beach, for others it might just be a steak dinner. But celebrating your achievements not only encourages you to continue, it allows you to stop and appreciate how far you’ve come.
Track Your Progress Closely
There are a ton of ways to track where you are on your journey toward FI, and I have a recommendation of my own. But no matter how you keep up with it, knowing where you are is important in keeping your morale up!
Whether you’re paying off debt, eliminating your mortgage, socking away emergency funds, building an investment account, or tracking your net worth, it’s important to know where your money is going and what you could be putting to better use.
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For myself, in addition to my financial software, I keep an Excel spreadsheet with a graph that I update each month after I pay the mortgage. It’s a large, visual reminder of how close we’re getting to totally leaving debt behind us, and that’s exciting to see! Every few months I’ll email it to my wife to encourage her, too.
So there you go, a few ways to improve your day-to-day FI journey. What are some things you’ve done to keep yourself encouraged and enthusiastic on this long (but totally worthwhile) road?