When you picture spring after the long, cold, dark winter there are flowers blooming, people emerging from their homes to enjoy the outdoors and longer sunny days with cool spring breezes. But in actual fact, in this first full month of spring, the weather is far from idyllic. There are days upon days with heavy rain and dark clouds. But as they say, you need these April showers to bring May flowers.
The same analogy can be drawn for your finances and getting your household budget in tip top shape. You need low debt and rainy day savings, which may mean that you need to sacrifice in the short term to reap the rewards of your financial goals.
“Because financial goals like paying down debt and building up savings can take a long time to achieve, it is sometimes difficult to stay motivated and to stay on track. And in truth, the sacrifices that you have to make on a daily basis can seem challenging. This can be even more difficult if you’ve been used to the instant gratification of credit use” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“The key is to recognize the relationship between your financial goals and how those daily sacrifices contribute directly to your overall success. You can’t have beautiful spring flowers without the rain; you can’t achieve your financial goals without working hard to get there.” says Schwartz.
Here is how to kick start your rainy day savings and debt repayment plan:
Dual track plan
Identify your goals and make sure that you’ve got both savings and debt payments covered. You might feel like you will make more impact if you focus on one over the other, but you’ll run the risk having to use credit in an emergency if you don’t have savings and debt repayment running in tandem.
If you have a sizeable debt load to repay, recognize that it is probably going to take a while to get there. When you are setting up your budget to address your goal, cut costs where you can, but be reasonable in your expectations. Be realistic in the likely timeline that it will take.
If you are gung-ho to reach your goal, you might set up an austere budget that allows no extra spending whatsoever. Not only is that impossible to maintain, you’re not leaving wiggle room should you encounter expenses along the way that you aren’t expecting. You are better off to extend your timeline for the sake of success.
Connect the dots
For extra motivation, calculate the benefit of your “sacrifices” over a given time period (e.g. a month or a year). Have you cut back on entertainment or travelling? Draw on your old spending patterns to determine the savings and understand the financial benefit of your sacrifices. That’s motivation right there!
Speaking of rewards, there is no reason that you can’t have fun when you are funneling your money towards rainy day savings and debt repayment. You’ve just got to plan it out, budget for it and become skilled in finding free or low-cost “fun”.
The promise of rewards can be extremely motivating to stay on track to reach your goals. Before you know it, your sacrifices will yield big results worth celebrating, just like those April showers bringing forth May flowers.
Are you ready to make sacrifices in the name of your financial health? The first step towards your success is to develop a plan to pay down debt so you can accumulate savings. Call us at or click our online debt analysis.