Personal Finance in the Absence of Patience

It takes a very long time to reach a point in which one can say, “I am financially comfortable.” Unfortunately, patience is no virtue of youth.

I don’t necessarily want to have more money for consumption of excess, but I do think about how lovely it would be to have a house someday, my own business, and enough money in the bank to weather any possible emergency. Over time, I’ve developed enough skills and work experience to command a higher salary, but sometimes I get discouraged and feel that I’m not going to reach my goals fast enough at the rate I’m earning and saving. At times it feels like I’m working hard and sacrificing much for a pipe dream. As Nina points out, there are plenty of people like me having trouble saving.

I’ve come too far in my finances to give up now. To get past this personal finance plateau, I figured I’m going to need some creativity and renewed motivation. I found a couple of things on the internet that may help simmer the flash flames of ambition, and help one stay focused on money goals.

 

A Goal Thermometer for Your Piggybank

Okay, so I’m a sucker for visual representation.

If you’ve ever worked on a fundraiser, you’re familiar with the power of a goal thermometer. Everyone gets excited when the fruits of fundraising efforts raise the goal thermometer close to the top. If the goal is far from being reached, you know exactly how much more is left to go. It’s a beautiful and simple illustration that displays quantity and suggests progress and immediacy.

I have no fear of risking corny or tacky attempts to keep me motivated about my finances. With a few customization changes to the following thermometer style chart, a similar visualization can be created for your finances on Excel, and perhaps on other freeware spreadsheet programs.

Simply designate a time period for Column A. For me, it will be months. In Column B, simply put how much money you have saved that can go towards your goal. Input the formulas and follow the directions for creating a graph in the thermometer style chart, and you now have a picture of how well you’re doing, or how much you have to go.

I plan on having two goal thermometers. One is for measuring how close I am to paying off my total debts, and the other thermometer will be for how close I am to raising the necessary start-up capital for the coffee shop. I wish I had thought of this earlier. When I first started paying off bills and saving money, it honestly felt like I was doing everything in the dark. Now I’ll be able to see I’m working towards something. And the last thing I want to do is see the thermometer get taller by increasing my debt. Being able to see that my efforts will have an effect on my goals will certainly help with my patience problem. I won’t suddenly be calm and at peace, but I’ll definitely have feedback that the hard work is worthwhile.

An Alternative or Supplement to Expense Tracking: Habit Tracking

When times get busy, I can’t always keep track of every single expense on a daily basis. There are some days I have to spend an hour going over my receipts and my debit account activity to retrace my spending to keep my Expense Tracker up to date.

The whole point of expense tracking for me is to see how much I’m spending, make sure I’m sticking within budget, and determine whether or not I’ve done a good or poor job of managing money for a particular period. Keeping my expenses low and staying within budget is vital to my money-saving strategy.

If there’s a hole in my Expense Tracker for an entire day, I get annoyed and discouraged. It’s not that I don’t want to put forth the effort to track my expenses: I just can’t keep a perfect record during crunch times. Rather than be hard on myself, I looked for answers that can help me understand and have patience with the challenge.

Reinhard Engels points out that it’s nearly impossible to make keeping track of stuff an automatic process. An easier thing to do is track the actual habit that you’re trying to change. He proposes using a habit traffic light to give you an idea of well you’re doing changing that habit.

For instance, if you were trying to gauge how well you curb spending, at the end of the day you’d put a green dot on a calendar for a job well done. If you had a slip up that day, you’d put a red dot. For a certain day in which there may be an exemption from sticking with the new habit (like a special occasion), then you put a yellow dot. Gradually, the calendar gives you a picture and an understanding of your performance.

I think habit tracking is a great idea for anyone who wants to do a better job of cutting their spending, but finds the idea of expense tracking far too tedious.

For me, I’m going to insist on expense tracking. I’d be much happier if I kept up with expense tracking on a daily basis. It’s not much work to add some dots to a calendar at the end of the day to judge how well I expense tracked. In fact, I think I’ll be more motivated to expense track after seeing a calendar full of green dots.

It much easier to be patient when you know there’s progress. I can’t wait to try out these tips myself.