Well one of the little mentioned things that I do to help keep me on track with my savings goals are doing some feedback. It’s part of the reason I calculate my net worth every two months and periodically check my account balances in between those updates. The positive feedback keeps reinforcing my goals and keeps me on track even when I feel I’m watching a mountain slowly shift a millimeter.
So how do you create feedback? Well some people can get by with just looking at the numbers, but I’m a bit of a visual person so I like to do graphs or charts. So depending on the data I have available I will track my progress over a period of time so I can see that I’m actually going somewhere. I keep calculating my investment net worth to show progress separate from the mortgage and house value changes which at times seriously outweigh my investments.
That was likely the most frustrating thing about the downturn last year. I had to keep reminding myself to keep saving and eventually I will see progress since I felt like I was shoveling the money into a pit never to be seen again based on my account balances.
I think that is why I’ve been happy to switch over to paying down the mortgage for a goal. It’s instant feedback and it always makes progress regardless of the market. When you put in $400 for an extra payment, the balance goes down $400. Simple and straight forward.
Do you suppose that is why debt repayment blogs are so common? Debt repayment is sort of instant gratification for personal finance while wealth building takes time and can feel like your moving backwards depending on the market. In the end both are required so even if people avoid investing at the start they are still going to have to learn how to do it.
In the end it doesn’t matter how you do it, but some sort of tracking mechanism is useful to help keep up with your goals. It doesn’t have to be fancy for debt, but you might consider doing some accounting tricks on your investments like keeping track of your contributions rather than you account balance to help you see your progress even in a down market. The how isn’t so important, it is the feedback that matters.
How do you use feedback on your savings goals or debt repayment? If you want to share leave a comment.