Debt free and now on the long road to freedom.

[imustachemystash]

Well, we are finally debt free (I'm not counting our small mortgage).  Woo hoo!  According to my calculations, we will be FI in 10 years if we continue living in this condo.  10 years seems so long though!  We are saving 60% of our income and with 2 little kids it would be hard to increase that percentage.  I kind of want to move to a house and that would delay FI even more.  I need help with staying motivated.  I did so well when I had the challenge of becoming debt free because the time frame was shorter.  10 years is a long time though.  How do you guys break down your large goal into smaller objectives to see progress and feel like you are accomplishing something?  Also, I feel like a lot of what I am counting on are our investments and the outcome of them are kind of out of my control due to the economy.  Any thoughts?

[stevesteve]

Congrats on only having a mortgage!  That's a great first step (I'm not there yet, will be soon).  You're not out of debt but at least your remaining debt is substituting for rent which is something student loans or credit card debt don't do.

Different people stay motivated by doing different things.  Beyond an FI goal (which, I actually don't have, explicitly) try shorter term goals at budget changes.  So for instance we're about to pay off student loans so that is about $1,000 of our budget that will be reprogrammed.  While at least $900 of that will end up going towards mortgage or retirement savings we make it negotiable so we can either take a bit for adding to a vacation fund or something else.  Even if we put all $1,000 towards savings it has given us another time to reaffirm our high savings and it's not just make a decision now and we can't touch it for 10 years.  The same goes any time we get a raise, or when I take in money from side jobs I pick up.  I like changing goals based on changes in income / expenses.

I don't really break down my goals too much.  I have three goals that I can think of at the moment.  Pay off student loans (~1, 5 years), pay off mortgage (6 years) , have enough money to pay current expenses from dividends (whenever the market allows based on maximizing savings).  The first two are pretty much governed by strong incentives so I'm not going to be doing more to meet those goals early although I will try to save more.   That means in the short term I focus on what I enjoy doing and trying to find non-monetary things or other ways of optimizing.  I find it useful to not think of everything in a goal-oriented way while being goal oriented.  It's mostly, I live off of x quite well.  That allows me to save income minus x.  Let's enjoy all that I do with x.

[Frankies Girl]

Great job wiping out your debt! :D

And 10 years isn't that long of a time period... when you contrast it with the 30+ years that many take to retirement and how most folks will NEVER reach FI. So maybe start rephrasing that to the fact that you're going to reach it in only 10 years.

As far as keeping motivated, I try to break things down into mini-goals. We started this year living off of my salary only with the idea that we'd try it for 3 months, and if we could do it without too much trouble we'd make it permanent (which we did). We then added the goal of maxing my 401K, and the next goal is to hit a certain number in savings to sweep into a brokerage account. You could also add some challenges  (only $XX per month on groceries or "no eating out for a month" or get to a certain savings level within X months). There are LOTS of things you can add in to keep you motivated. (there's even a challenge section on this forum!)

And I do think that if you're really wanting a house, a goal would be to see if you could increase your salary or get some money making side gigs to start a house fund that won't derail your FI goal date. You say that you're currently saving 60% and have two kids, which is awesome - but don't rule out the fact that most people do get raises (and don't be afraid of asking for one if your workplace isn't great on annual raises!) or finding something you're good at to make some extra money - or even selling some stuff.

[vern]

Saving 60% with two kids is impressive!

[imustachemystash]

Thanks all!  You are absolutely right when you said 10 years is not that long compared to 30.  That's what I needed to hear!  I will rephrase it to "We will be FI in ONLY 10 years".  Funny how wording things makes such a difference.

[arebelspy]

I need help with staying motivated.  I did so well when I had the challenge of becoming debt free because the time frame was shorter.  10 years is a long time though.

Set milestone goals that can be reached in reasonable timeframes.

Net worth goals, percentage goals, etc.

Striving for, and reaching, these goals may help keep you motivated.

[lbdance]

I agree with setting small goals.
For us our plan is about 10 years to reach FI. However this is subject to change due to the fact that my husbands job may have a limited timeframe.
We have set some short term goals for whilst we have two guaranteed incomes to try and reduce the mortgage and start some investments (other than retirement funds provide by employers)
This also helps with a feeling of achievement.
Once we have reached those short terms goals (end of the year / early next year) we will discuss the goals for the next 6 months / year. This means the focus will always be on something that is relative.

[NinetyFour]

If you can make some small adjustments and get your target down from 10 years to 9 years, that might make a big difference psychologically.  Two digits --> one digit.  Might seem silly, but it makes a big difference in *my* head!