Goals vs. Process

[LAJPP]

Short version:

How do you stay on track with savings goals without becoming fixated on them?

Long version:

I got my first well-paying job out of school this time last year. While looking for ways to save money and pay off debt, I stumbled into the usual FIRE blogs/forums (Reddit, jlcollins, ERE, etc.). I proceeded to become obsessed with maximizing savings, started a Mint account to keep track of everything, and all in all had a pretty successful year! Now though, I'm starting to feel like there are diminishing returns to looking at my balances all the time. In fact, I feel like the goals have been more distracting than anything. I got fed up, deleted my Mint account, and am considering embarking on a year of savings without looking.

My general thought is I'll automate transfers everywhere, making sure that unless something wild happens I won't have to dip into anything. That way I'll just worry about having enough money in my savings and checking to do day-to-day activities and save enough for smaller lump purchases like car insurance. Then, I might check in mid-year and see how things are doing. My hope is that I'll get roughly the same results without becoming a bit crazy.

Does anyone else do something like this? How do you stay focused on your savings goals without them taking up a big chunk of your brain?

[big_slacker]

Yes, just autopilot everything and don't worry about it. It's normal to be all pumped up about seeing progress but after a while just live your life and check up on stuff quarterly.

[Slee_stack]

I like people who post solutions to their own questions.  :D

Check the status as often as you are comfortable checking your status.   Everyone is different.  I can check several times a week, but I'm doing it more from a micro managing level.  Where should I put this weeks cash type of thing.  Admittedly, its kind of like gaming or timing the market.  Its bunk, but I get a little enjoyment choosing between funds, P2P or other.

If you don't enjoy that type of thing, you are doing what's right for you by putting it on auto.

[Zikoris]

I just don't set specific savings goals. My goal is to minimize expenses, and save everything that's left. The effort level we put in involves sitting down twice a month, on paydays, to pay off our credit cards and do investment account deposits. Every few months I do a retirement date projection to see how we're doing, and otherwise, that's it.

[LAJPP]

Yeah I guess I get nervous because I'm new to this stuff. Sometimes it seems like others are doing something more sophisticated (and I'm doing it wrong), but glad to hear it's common just to let it ride. Thanks!

[WildJager]

I mentally separate my investments and my day to day spending.  To some degree, money in my investments don't really feel real.

For example, I'll think thoughtfully if today's $5 purchase is really worth it, and if I do end up purchasing it I log it into my budget.  I track my spending throughout the month to ensure I'm keeping my spending under budget.  Then I'll analyze why I went over budget by some small amount on a specific category for whatever reason.

Then I check my investments and see that over the course of all that work my net worth shifted $10k, so I was basically wasting my time.

I think that's why some people don't bother budgeting once your habit patterns are ingrained and you are on course.  Just have a plan and stick to it.  I budget just so I can do long term forecasting (know what elements I can tighten down on during lean years), but I don't delude myself into really thinking that my $5 over budget this month is going to break the bank or anything.

[aceyou]

I focus on things just to reach a new baseline.  So for example, I tracked my food spending for about 6 months.  Once it was consistently to a number that I liked for about 3 months, I just stopped tracking because that's my new normal.  No need to track it anymore, just live. 

[Huskie87]

I think this is very normal and a healthy reaction to what you've been doing.  When you first start on this path, you should be constantly double checking your numbers and re-optimizing the strategy.  As you learn new ideas and concepts, you can incorporate them into your strategy.  For example, you might start out by saving a lot, but then discover the concept of tax planning which causes you to reorganize how you save.  Anytime you run into a concept, you'll go back and 'tear down' your original strategy to see if the new concept can further optimize your strategy.

However, at some point you start realizing that your plan is pretty well optimized, and you've established the habits that will lead to success.  It's at this point that letting go can begin.  This can be very tough initially, and some might handle this better by simply challenging yourself to lengthening the frequency of check-ins.  Slowly you'll realize that you're not making mistakes and your plan is exactly in-line with where it would have been if you were checking in more frequently.

So, if you were checking in daily, try weekly check ins.  Then try bi-weekly and monthly and so on.  I definitely think these check ins are valuable, I do mine monthly, as there is considerable risk in online security and fraud.  So I wouldn't recommend killing off your check in completely.

Also, and MMM has touched on this slightly in one of his articles (maybe low information diet, or circle of control or stoic) but at some point we need to really understand that mustachianism is a way of life and financial independence is an inevitable state that we arrive at due to processes that we build into our daily life and practice routinely.  This is important so that we don't falsely attribute FIRE as a destination for happiness, because that will only lead to disappointment.  The happiness should come with our daily lives...today...and we should be proud and happy in our actions right now.  The constant checking in is again natural early on, but eventually can be a sign that we're placing too much emphasis on the end game rather than the journey.

[trollwithamustache]

If you're automating savings  and starting saving early in life, you've got a great start.

If its your first job out of college, don't stress the savings %. Keep decent budget records so you know what you spent / what things cost.  There are a million different ways to live and optimize your life happyness so figure you're going to make changes.

Part of your plan should also include increasing income. Near term that means learning about your job and company and in general how companies in your industry do stuff.  Self improvement even if you don't exactly know how it will pay off immediately should be viewed as part of the MMM goals. I try to have at least one professional education topic going (library books are free) at any given time. It varies how much I am devoting to it.  If you find yourself checking in on already set stuff more than you like, try to switch that effort over to learning something new. time spent researching fun side gigs could count too.

[arebelspy]

FIRE is a fun puzzle to solve when you first stumble on it.

After you've figured it out, it's often a waiting game (unless you had been a saver your whole life and suddenly discover the concept and realize you're FI, but assuming you're younger and still building your stache).

Watching and waiting can drive one crazy.

I think your "automate it all, check in every once in awhile" is the best idea.  Solve the puzzle, get it pointed in the right direction, then go live your life.

FIRE is inevitable a few years later.  Go enjoy the years in the meantime.

Good luck!  :)

[J Boogie]

I obsess over woodworking which keeps me from going crazy checking my NW progress every day.