The Key to my Success After Debt

I’m nearing my one year anniversary of paying off my student loans. This time last year, I was in the final stretch! As I get closer to March 27, I’ve been reflecting on what I’ve done since then and what any of that means.

My biggest challenge has been that saving doesn’t ignite the same feelings that paying off debt does. The excitement of paying off debt builds with each payment as you get closer to zero. Saving starts at zero and builds until you decide to stop.

My transition from paying off debt to focusing on other financial goals has been a bit bumpy. Thankfully, I’ve been able to shift most of my money from debt to saving, without succumbing to lifestyle creep. However, the money has gone to several places. I had a tax bill eat up my initial momentum. I’m saving for a house, while  saving for retirement in my 401k and Roth IRA. I also paid for a vacation.

Unlike my loans, where I was single-minded, my saving has been many and varied. Not only do I have multiple targets, but I keep changing my strategy!

With all these different strategies, I attribute my continued success to one thing. I did this while I paid off debt, and I continue to do it with all of my savings adventures.

Pro Tip: Celebrate All The Milestones!

I believe I’ve been successful in my savings efforts because of the joy I give to each milestone.

The first step to celebrate milestones is to be aware of them. The single best way to be aware of any upcoming or current milestones is to track your net worth.

I started tracking my net worth right around the time my debt was dwindling. I was paying off roughly $2500 per month in debt, and I wanted to keep that pace. I set up my net worth to track where my money was going and where I wanted it to go. For example, I track my retirement savings and my house fund. I want my money to go there.

My monthly net worth snapshot shows where my money is. Each line item comes with its own milestones. I have so many balances to get excited about!

By tracking my net worth, I’m able to see the moment when I cross another hurdle. For my growing balances, I rejoice every $5000 gain. For my declining car loan balance, I give a little Hallelujah every $1000. I actively give a little woot woot to the following balances.

  • 401k
  • IRA
  • Total Retirement Savings
  • House Fund
  • Total Net Worth
  • Car Loan  

With all these categories, it seems like I have a new shiny achievement every month.

In January, I had a WHOLE $10,000 in my 401k. Can you believe it?? I’ve only been saving in earnest for less than a year and I already have $10,000. That’s with the current declining stock market environment!

In February, I passed $20,000 saved in the House Fund! That’s $20k saved in less than a year!

Also in February, I’ll have less than $8000 left on my car loan! It feels like I just took out the loan and I’m almost halfway through the 3-year term!

In the next month or two, I’ll have over $30k saved for retirement. I’m not even 30 and I’ll have 30k saved. Woot!

Depending on my other balances, I may already have a $65k net worth. I’m knocking on $70k’s door!

Without tracking my net worth (publicly or privately) I would miss all of these little motivators. These are all gold stars that I’m on the right track. These are all little whispers telling me that I’m doing the right thing.

I don’t expect to get excited about every $5k for too much longer. Soon the market will swing my portfolio by that amount. That is why it is important to celebrate all the milestones while they are small. I argue that the slower your progress, the more important it is to celebrate even the smallest achievements.  The more work it takes to get there, the more you deserve a confetti horn emoji.

I hope I’ve convinced you to celebrate your own achievements. It’s pretty amazing what can happen when you pay attention to your money.

Have you celebrated your progress lately? Share and I’ll cheer for you!

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8 comments

  1. These are amazing accomplishments! When you get a house, you can have the same feeling of paying off debt as fast as possible while still “saving” (i.e building the equity in the house!) Win win! We just crossed into financial stability (i.e. Finally having enough cash flow to pay all our expenses without having to borrow) so I am very much looking forward to our first debt repayment in the next couple of weeks!

    1. Thanks Mrs. Unchained! Glad to hear you are financially stable! That’s great! I’ll give you an early woot woot! to get you started on your debt repayment. It’s tough, but its soooooooo worth it.

  2. I love this approach, Kate. Even if “celebration” is just saying “Yay!” outloud, it still matters. And it helps keep that momentum going even when it’s otherwise tough to stay on the financial straight and narrow. We hope to hit a *big* milestone soon, and I’ll let you know when that happens — market willing — because I want all the confetti emojis then. 🙂

    1. Most of the time, my celebrations are a simple “hooray” on the couch while I eat my breakfast. It’s not much, but it’s enough to keep the momentum going!

      I’m excited to hear about your *big* milestone! I’ll get the confetti ready!!

      1. Tell the markets to stop slacking so we can earn the confetti sooner. 🙂 Not many milestones we can hit without market help these days, but I suppose that’s its own Yay!

  3. I have totally faced this malaise of saving and how it just isn’t as exciting. Celebrating every milestone is awesome, but having concrete dreams and looking forward to those works even better for me! When you’re in debt, reaching $0 is the concrete goal. You can picture that. With saving, it’s some arbitrary house, some arbitrary life, and some arbitrary future. When you start thinking about exact things this money will buy you (ie: my husband home with my kids all day and us taking the kids to Cambodia), you get a whole lot more involved in saving!

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