One of the basic precepts that Dave Ramsey pushes is “gazelle intensity” to get the debt paid off. This is a great idea to get people motivated to start, and may even keep some people going for a small amount of time. We have at this point been working on paying off debts (first the credit cards, then one of the spouse’s student loans, then the car) for about two years now. And we still have another 11 years to go. Motivation alone is not going to get us there.
Motivation in people tends to fade after the first initial push. If there is nothing left to carry through for the rest of the process, you’ll find yourself having to start over and over. If you only have a “small” amount of debt, and can get rid of it in two to five years, maybe motivation alone is enough. It’s hard to maintain it for the entire marathon of a mortgage or the type of loan debt we’re carrying.
The answer, then, is developing habits rather than relying on motivation. The spouse and I were talking about this in the context of exercise/losing weight, which has always been harder for me than finances. I do best when I have a routine that I don’t have to think about and don’t have to make a decision about on a regular basis. For example, I stop by the gym every day (or almost every day) on the way home from work. It’s simply part of my commute, and I don’t even have to think about it. Looking at it that way has allowed me to get exercising back into my routine for three weeks now. The longest stint was six months without ever making a decision about whether I was going to go or not.
The same principle applies when trying to save money or pay down debt. The more you have to think about it, the more likely you are to fail since you have to make so many decisions. The way to deal with it is to put systems in place so that you don’t have to decide or think about how in debt you are or what you need to save. For example, we deal with the issue by setting aside money first for rent, then for loans, so that we’re only living off what’s left. It makes decision-making much easier, since we don’t have to think about how much to apply to debt unless we have extra.
The downside is that in months where something odd comes up (hi medical system) we do have to decide how to make it work, but most months we don’t have to think about. That way, we don’t necessarily need to maintain the gazelle intensity and the associated stress for 11 years. Hopefully that will allow debt repayment to become just background noise that we just follow through on until the debt is done.
I agree with you. It’s a Habit and the more I Practice the better I get!
LikeLike
Exactly! Putting procedures in place so you don’t have to think about it helps as well!
LikeLike
Great article, I like the correlation between paying down debt and exercising as most people don’t like either. Automating my savings has helped me since I dont have to think about it at all.
LikeLike
Same here! We actually have two automatic transfers, one for “bills we know we have coming but don’t happen every month” and “longer-term savings via ETFs.” They’re both listed as fixed expenses.
LikeLike
Habit is something I’ve only recently discovered and it has been a great 2016 because of it. Just focus on setting things up to make it as easy as possible to do something every day so it becomes part of who you are. That is such a powerful thing. I always seemed to focus too much on psyching myself up in the past, rather than focusing on making the decision easy. Nice article!
LikeLike
Thanks! That’s great that you found how well habits work. And it’s so much less stressful isn’t it? You just don’t have to think about the process, just let it work.
LikeLike