I recently started reading Living Forward by Michael Hyatt and Daniel Harkavy. The premise is creating a “life plan” based on the legacy you want to leave, along with a tactical strategy you’ll implement to pursue your vision. The author’s ask you to imagine your funeral and what would be said about you. If you don’t think where you are today will lead to the legacy you want to leave, the goals you make in between the gap are what you’ll pursue through your life plan.
This concept was essentially my motivation to pay off our loans ASAP, looking into the future and making a plan to achieve the desired result.
When Drew and I got engaged, we began discussing the type of future we’d like, starting a family, personal goals, etc. We knew paying $986/month would be a hindrance, in general, and we didn’t want to live with that weight for the next 20+ years. We knew it would largely play into many decisions we would make and trap us down.
So we created a vision for our money (like a short-term life plan). The end goal was to pay off our debt before having kids. This led us to a goal of being debt free within 2-3 years.
We knew the starting point ($76k of debt) and where we wanted to go (debt-free within 2-3 years).
Next, similar to the advice from Living Forward, we needed to fill in the gap with a tactical plan (how we’d attempt to pay off $76k in less than 3 years).
This led to Drew researching budget tools and us using YNAB (You Need a Budget). We set a budget of what we thought was a reasonable amount of money in each category/month (food, spending, entertainment, clothes, bills, etc.) and began tracking everything we spent.
The difference between where we were and where we wanted to end up was easily measurable with this tool. The key was keeping an eye on the end goal and our progress to get there, adjusting the plan to meet the goal if we got off course. Click here to learn more about our strategy.
Where I want to focus today is encouraging you to realize where you are with your finances, determine your end goal, and create an action plan to get there. Make the action plan measurable, and view your progress often. I recommend checking your budget before you spend money, as well as your weekly and monthly progress. Believe me, you can get creative in cutting back the grocery bill if you know you have $50 remaining and a week before the month ends.
So what’s your end goal? Pick something that motivates you. Here’s some of my motivations:
- Margin for when unexpected expenses arise, for pursuing a dream (like Drew quitting his job to pursue a career change), and to decrease worry over money (remembering, ultimately, God’s in control and my source of peace)
- Have a savings worth 6 months of living expenses
- Increase generosity
- Save for retirement
- Buy a house with a nice down payment, taking on less interest/debt
- Pursue investments and other income streams
Another take-away from Living Forward, is to create “pull power” with the goals you set. In other words, your goal should be motivating enough to pull you through to the end.
“The lesson is simple. You get what you focus on. What we see ahead impacts the actions we take right now. How we live and lead is directly connected to what we see. What’s important is that the future be enticing enough to stay focused. We call this ‘pull power.’” -Living Forward
If we didn’t have specific goals when we started our debt-free journey, I predict we’d still have about $40k in debt. If we had passively said, “hey, I think debts bad and we should pay off our loans,” we probably would’ve put extra money left over each month towards loans. However, I anticipate it would’ve been about half as much because we’d be thinking in terms of “that’s a nice goal,” but probably not filtering our decisions through it.
What would you need to change to save ___fill in the blank___/month to hit your goal in ___fill in the blank___ time-frame? Remember your end goal often and filter spending habits through this.
Bonus: making sacrifices to pay off debt is typically a choice. Reflect on your end goal for motivation and fight against a “woe is me mindset.”
What’s the future you desire? Would love to hear your goals in the comments!