This post is by our regular contributor, Erin.
That’s a loaded question, isn’t it? What’s your financial “why”?
Why should you save? Why should you pay off debt? Why should you work on creating a business? Why should you invest? Why should you work toward a better financial future?
It’s easy to answer, “Well duh, because I’m supposed to!” Sure, it’s the “right” thing to do…but that doesn’t give you a lot of motivation. And without motivation, your chances of success decrease.
You need an anchor – a why – to really pull you toward your goals.
Doing What You’re Told Isn’t Enough
Let’s start with a few examples.
We all know on some level we should exercise and be active. It’s good for our health. Yet, many of us don’t do it, or we do it begrudgingly. We’re told to go running, take a fitness class, or take part in sports. But when we’re tired and just want to crash, is that enough of a push?
Similarly, we know we should scrap all the junk food we have and eat whole foods as much as possible. But cooking from scratch is too time consuming. We choose convenience, even if it’s not the healthier (or cheaper) option.
In both cases, extrinsic factors are at play. Exercise can make us stronger and eating well can ensure we stay healthy. Unfortunately, those truths aren’t enough to keep us going when we have a bad day and let things slip.
It’s the same thing with finance. We know tracking our spending is a good idea; we know we should get started with investing sooner than later; we know consumer debt is a bad thing to have. Yet, some of us have trouble taking action despite that knowledge.
You Need to Have Something You’re Working Toward
That’s why you need to focus on intrinsic motivators. They’re much more meaningful than saying, “I’m only doing this because it’s good for me.”
Having a “why” makes your actions more intentional because it gives you purpose.
Let’s go back to the above examples to illustrate how this works.
My fiance is a runner. He was on the cross-country team throughout college, running anywhere from 50-80 miles a week. He trained for races constantly and ran a marathon right before he graduated.
However, his passion for running has since waned. He runs consistently enough, but without something concrete to work toward, it’s very easy for him to take a day off. If he was training for a race, he would have much more motivation to run when it’s raining or when he’s tired.
As a picky eater, consuming healthy food has always been a struggle for me. I know eating better is something I have to do if I want less health problems in the future, but that’s not enough for me to overcome my aversion to certain food.
Instead, I’ve been trying to focus on how much better my body will feel and how much more energy I’ll have if I start eating healthier. More energy means more efficiency, which helps me be a better worker.
As you can see, working toward a concrete “why” provides you with a lot more motivation and purpose than simply knowing you should do something.
How You Can Apply This to Your Finances
Most people need a strong “why” to get excited about personal finance. After all, spreadsheets, budgets, investing, and navigating insurance sounds boring to many young adults. Their “why” sounds more like, “Why bother?”
I’m willing to bet many of you have abstract financial goals like saving enough money to buy a house or a car, to start a family, to go back to grad school, or to start a business.
Maybe your goal is to simply pay off any debt you have so you can do what you want with your money. Or perhaps you’re working toward saving enough money to retire comfortably.
Whatever your goal may be, focus in on the strongest “why” you have for it. Many people want to work toward creating a stable financial future for themselves and their family, but you should go even deeper than that.
- Do you want to give your kids the childhood you weren’t able to have? Do you want to travel with them so they have experiences to cherish? Do you want to give them the peace of mind of knowing you’ll be taken care of in retirement?
- Do you want to start your own business because you dream of changing the world? Or do you simply want the autonomy that comes with being your own boss?
- Do you want to get your spending habits under control so you can pay off your debt and work toward something like financial freedom, staying home with your kids, or starting a new career?
Nail down what you want to work toward most in life and focus on making that your “why”. Any time you start to question the journey you’re on, you can refer back to it for renewed inspiration and motivation.
My Own “Why”
It’s no surprise side hustling (or trying to run your own business) requires a great deal of motivation. It’s not easy to work additional hours after you come home from your day job. It’s also daunting to give yourself the sole responsibility to earn a salary.
To avoid burning or stalling out, having a “why” helps. You may have a lot of rough days when you question why you’re putting yourself through all of this, especially when you’re dealing with rejection or bad clients. Passion alone isn’t always enough.
So, what keeps me going as a freelancer? A couple of things:
- Student loan debt: If I want to pay off my student loans, I need to continue earning more. Being self-employed gives me more control over that. The “why” behind paying off my student loans is that it’s the only debt I have, and I want freedom. I feel like a cloud is hanging over my head and I can’t escape it until my debt is gone.
- Retirement savings: As I didn’t have a 401k through any of my employers, and didn’t know about IRAs until a few years after I began working, I feel a little behind. I want to pay off my loans so I can put more money toward my retirement savings. I know we probably won’t have Social Security to rely on, and I don’t want to stress about affording retirement.
- Having choices: Saving more gives me more choices, which is invaluable. Being location independent is pretty awesome on its own. I like knowing I can travel or move around when I want.
On days when I doubt what I’m doing and think going back to a 9-5 would be better, I remind myself of what I’m working toward. Maintaining my freedom, saving more, and paying off my debt are all strong enough reasons for me to continue moving forward.
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Finding your financial “why” can do wonders for your motivation and subsequent ability to reach your financial goals. If you’ve been going along saving/paying off debt/investing because it’s what you were told you do, take a step back and think about why you should be doing it.
Everyone’s finances are different – determine your own reasons instead of following the crowd.
What are your major financial goals? Why are you working toward them? Do you think having a “why” is important when figuring out what path to take in life?
Financegirl says
“Doing what you’re told isn’t enough” – YES! Story of my life. I went to law school and became a lawyer because that’s what you do in my family – you go to school forever. Turns out that title isn’t worth much when you hate your job. I’m so much happier as a planner and blogger.
FrugalRules says
I could not agree more Erin. You have to find what motivates you and what will keep you going when you’re tempted to give/ease up on what you’re working towards. Following the crowd may seem like the right thing, I know I’ve been guilty of that myself, but personalizing what you’re working towards will bring more satisfying success in my opinion.
DebtDiscipline says
Having a “why” helps keep you focused, motivated to achieve the goal even during those bad days. Building wealth, prepare my children for their financial futures and help others are the things I’m working on now.
Pretend to Be Poor says
I believe that your “why” is actually more important than the details of how to save money or earn more money. And that why is different for everyone. Some of our motivating reasons are paying off our mortgage, gaining flexibility to work less or at jobs that pay less, and donating money and volunteering time to people in need. In fact I just posted about why generosity is so financially motivating for me: http://www.pretendtobepoor.com/india3/
Hannah UnplannedFinance says
Finding an internal motivation is literally the only thing that will help you make headway towards your goals in all circumstances. If you don’t want your why enough to make sacrifices, then you might need to dig a little deeper.
Eyesonthedollar says
They why is so important. Otherwise you’re making money but not giving it a purpose. It’s very easy to lose money that isn’t designated for a goal.
Harmony@CreatingMyKaleidoscope says
Arriving at an answer to the question of “why” has changed my life. I was so lost and unmotivated just floating along the traditional path. It’s hard to get excited about old-age retirement, so we never really paid much attention to our spending. Every aspect of life carries so much more meaning now that we have decided to pursue financial semi-independence.
Erin @ Journey to Saving says
Financegirl That definitely applies to just about everything in life, doesn’t it? There are so many unconventional routes we can take in life, but many people don’t think about them because we follow what’s considered normal.
Erin @ Journey to Saving says
FrugalRules Yes, exactly! Everyone has a different “why” and that’s completely okay. We have to find what works for us to succeed.
Erin @ Journey to Saving says
DebtDiscipline It really does help. Those are all great things to be working towards!
Erin @ Journey to Saving says
Hannah UnplannedFinance Agreed. If you’re getting out of debt because you know it’s the right thing to do, that’s great, but it’s not going to be enough to fight off any temptations you face.
Erin @ Journey to Saving says
Eyesonthedollar So very true, Kim! Every dollar should definitely have a purpose. It makes it a lot easier to control your spending that way.
Erin @ Journey to Saving says
Harmony@CreatingMyKaleidoscope That’s awesome to hear! Having a “why” does give you more direction and purpose – with anything in life!
ShannonRyan says
Knowing the why behind your goals is absolutely critical. Not having that answer, is one of the biggest reasons why people fail to achieve their goals. Life is busy and chaotic and it is always easy to tell yourself you’ll get to whatever tomorrow, but tomorrow turns into never too often. Knowing why I exercise every day, why eating healthy matters to me and the purpose behind my money, makes it much easier to stay motivated and do the necessary actions, even why I’d rather do something else.
AbigailP says
Our why is simple financial security. After years on disability, I have trouble feeling secure. (Thousands of dollars in medical expenses don’t really help.) So my “why” is to build a better life for us. One where I can breathe and not worry so much about how we spend. One where we can take a proper vacation — not just me going to FinCon and Tim going to Washington at the same time. Most importantly, one where we’re building savings toward more security — like rental properties and retirement savings. My “why” is a more secure future, and it’s hard to forget that.
Erin @ Journey to Saving says
ShannonRyan It’s definitely way too easy to procrastinate. If you don’t have the motivation, you’ll never do what it takes to change. I’ve been struggling with that as far as fitness goes – I clearly need a better “why”. =)
Erin @ Journey to Saving says
AbigailP I totally hear you on that, and that’s been my “why” for a long time as well. After seeing my parents fail to save and how hard their life was because of it, I always wanted to aim for security. Having peace of mind is priceless.
Beachbudget says
My “why” got a lot clearer the other day when a jerk of a client sent me a bully-ish email. That’s enough for me to not only save, but expand my horizons client and project-wise. Sometimes motivation comes in the strangest of places.
blonde_finance says
My why used to be unclear and I know that’s why I never really achieved any specific financial goal. Now my why is to work hard and get my all around finances together so that I can declare financial freedom not long after my son finishes college. It’s something that really motivates me on the days and nights that I work really long hours. I just think about how nice it will be to not work in a few years.
BudgetBlonde says
Having a why is definitely important. My family is my why. I know right now it’s my job to provide for them while hubs finishes up all of his requirements for medical school. My family is definitely what keeps me working hard!
Settle Your Finances says
I needed this reminder! I’m working to build up freelance income and pay off my student loan debt so I can have freedom in my life. I want to be able to make my own decisions about how my time and money are spent rather than having someone else decide for me. I’ve been having some trouble with motivation lately, and reminding myself why I’m doing all of this really helped put everything back into perspective.
mycareercrusade says
Hmm great post here Erin! A very thought provoking one
My financial why is all about being able to live life on my own terms, having “passive income” to travel, volunteer and spend as much time with the family as I’d like.. Having a why is a big motivator, @ least for me I’ve found :)
Looking forward to hearing how you continue to go
Erin @ Journey to Saving says
Beachbudget Aww :(. Motivation definitely comes from a wide variety of places. It’s good to recognize when it happens, though! I think it’s more important to have “FU” money as a freelancer as you never want to be completely dependent on one or two clients.
Erin @ Journey to Saving says
blonde_finance Financial freedom is a huge motivator for a lot of people, I think. Or at least having the option not to work (or do other work). It’s always good to have choices, and that’s something I’m always working toward.
Erin @ Journey to Saving says
BudgetBlonde Your family is a great “why” to have! I know my parents worked hard to give me what they could, and I’m always very grateful for that. Plus you’re setting a great example!
Erin @ Journey to Saving says
Settle Your Finances I’m glad the post was timely! Having a “why” is so important when you’re getting started with freelancing. When I began, my motivation was pretty much just to be earning something – not a great reason for when things were rough. Yours is much better!
Erin @ Journey to Saving says
mycareercrusade Thanks! I like that reasoning – it’s similar to my own. I prioritized family and travel a lot this year, and I’m happy with how it worked out. I’m always grateful for the freedom freelancing gives me, though not having to work or selectively working would be nice!
Jason @ The Butler Journal says
My main why is freedom. I want to pay off my debt and create multiple streams of income to have more freedom. I like my job, but having to ask someone for days off isn’t the best. Without debt and a 9-5 I will be able to travel a lot more.
Erin @ Journey to Saving says
Jason @ The Butler Journal Freedom is definitely a strong motivator for a lot of us!