Managing your finances can feel like it’s all work and no play. But it’s not just about self-control, delayed gratification and complicated spreadsheets. You can, and should, leave room for celebrating.
When you think of financial milestones, the big one that probably comes to mind is paying off debt. This is a huge goal for so many people, and it’s highly visible, meaning you know when you’ve achieved it. But there are other victories in your life, big and small, that are worth a celebration.
Important Financial Milestones: Paying Off Debt
Like I mentioned above, paying off debt is a big deal. Many people have to work for years to achieve this, and it can take sacrifice and careful planning.
But you don’t need to have zero debt to start celebrating. As you’re on your way, don’t forget to appreciate why you have the debt.
Maybe you’re paying off student loans, a car payment or a mortgage. If you think about what that education, that car or that home does for you every day, you can feel grateful even as you make sacrifices to pay for those things.
What if you’re paying off something you regret, like credit card debt or a degree you wish you hadn’t gone to school for? Think about the skills you’re learning as you pay off that debt, the commitment you have to your goal, and all the fun things you can do with that money when you’ve hit your debt payoff goal.
Moving from negative to positive net worth
Your net worth is your assets minus your liabilities (debts.) If your assets exceed your liabilities, that means your net worth is positive.
You should be tracking your net worth because it tells you the true value of what you’ve got. You’ll have a better idea of your progress if you keep track of your net worth amount.
Moving from a negative to a positive net worth means you’re going in the right direction. You’re building, not losing. So even if you’re only slightly positive, it’s an achievement worth celebrating.
Once you’ve hit a positive net worth, don’t forget to celebrate milestones like hitting the first $100k, $250k, $500k and so on. Other celebrations might include getting to your first $50,000 in your retirement accounts, or even getting a new promotion.
Building a Full Emergency Fund
A recent survey revealed that half of Americans don’t have an extra $250 to spare each month. That’s why the pandemic was particularly difficult for so many people. It was an abrupt, completely unexpected change to life as we knew it. And it’s exactly why we put emergency funds in place.
For most people, an emergency fund should have about 6 months’ worth of expenses saved up. Maybe you’ve determined you need more, or less. But whatever it is, reaching that amount takes a huge amount of pressure off of you and your family should anything unexpected happen.
And once you get there, you should treat yourself! Maybe you’ll splurge on a fun family weekend trip or a nice dinner out when you get to that point. Not there yet? Give yourself an incentive to continue saving.
Here’s the thing about achieving your goals: If you don’t stop to celebrate, you’ll just start looking for the next big thing to check off the list. You never really “arrive” at success. That’s why celebrating these milestones is so important.
Likewise, you should think about celebrating the anniversaries of these big accomplishments. When you’ve been debt free for a year, look back at the previous year and really think about how not having debt has impacted your life.
When you’ve had a positive net worth for a while, remember how it felt to finally turn that corner.
About Your Richest Life
At Your Richest Life, Katie Brewer, CFP®, believes everyone should have access to financial resources and coaching. For more information on the services offered, contact Katie today.