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Are Crazy Personal Finance Goals and Challenges Better Than Slow and Steady?

Next month, I’m going to be participating in a glorious, 10-year-old tradition—National Novel Writing Month. I’ll say a little more what I’m doing on November 1st, but this is my first time and I’m very excited.

National Novel Writing Month is like the Dave Ramsey of writing. You have to write a 50,000-word novel in one month. You slowflake your time, you cut out other leisure activities, you shut yourself in a room and avoid friends and family, you do what it takes.

Why? Because crazy, short-term goals inspire action. I couldn’t write a novel if it meant doing this kind of thing for a year. But I can for a month. And past experience suggests that without this kind of goal/event, I’d never get started in the first place, or wouldn’t keep going.

NaNoWriMo makes me think of the debate that so often happens in personal finance. Should you buckle down on your debt repayment goals with gazelle-like intensity and not look back until you hit the finish line? Or should you find a pace that keeps you from feeling miserable and (unreasonably) deprived so you stick with it?

My answer is yes.

For & Against Gazelle Intensity

Arguement for gazelle intensity: A large debt can weigh you down for years if you stick to minimums. And interest will often end up charging you half again as much, or even double. Intense debt repayment will free up the rest of your life and cost you less.

Argument against gazelle intensity: It’s one thing to be intense when you only have to do it for a year. When you’ve got to do it for 3 or 4 years minimum, you’ll burn out and give up entirely. Better to repay a little faster and more aggressively and leave the sprinting to people who are in for the short-term anyway.

From experience, I can tell you that the short-term sprints are fantastic. Paying off a credit card, paying off a car, putting away over half of our combined income for debt repayment—it’s a great feeling! It’s inspiring, it makes you want to do more.

But it’s also the sort of thing that can make you burn out. With so many years ahead, you find yourself wondering if you can keep this up. And it’s not a realistic expectation for most people.

This doesn’t mean I advocate dropping back to paying the minimums in between. Instead, I believe the best method (at least the best for us) is to set your monthly debt repayment goal somewhere above your minimums. As high as you can comfortably go. Then make sure that you have at least a little money put aside in your budget for fun spending. It doesn’t need to be much, whatever is enough to make you happy. $50/ea misc. personal for me and Micah is delightful and rarely always used. Other people need more, other people need less.

With this snowball, you still can’t afford lots of new gadgets, big tvs, expensive cars, and the like. But you’re not so stressed by squeezing out every penny that you give up on debt repayment.

Then mix it up with these bursts of gazelle intensity. The momentum and short-term nature keep you going and the payoff is fantastic. At the end, you’re more inspired and you feel great about the dent you’ve made in your debt.

When To Sprint With Debt Repayment?

Definitely at the beginning. Despite our initially meager salaries, it was great to start w/paying off the credit card in 2 months.

Definitely at the end. Sprinting to the finish in any project is a great way to wrap it up (providing you’re not skimping on quality, of course).

At intervals. It’s not easy to plan, but I’ve found that it’s especially exciting to cut down on spending on months when I have a lot of alternative income coming in. That way the repayment fund is being fed by both streams at the same time and gets impressive.

Are you a gazelle? Have you found it easier to come up with a method like ours, or something else?

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October 19, 2009 at 10:10 am


Debt Hater October 19, 2009 at 12:56 pm

I went the gazelle approach to paying off my debt. When it comes to debt, I think it’s best to set it and forget it. Pick an aggressive schedule for debt repayment, make the payments automatic and live with whatever money you have left. I did set aside money to have some fun because it was miserable in the beginning not being able to do ANYTHING! But now that my debt is all gone, I can hardly remember how painful it was for 4 years paying it off. Kind of like childbirth I suppose. Or, like being taught the way of martial arts by Pei Mei… maybe you punch that board until your hands bleed and cramp, but when you need to punch out of that coffin buried under six feet of dirt, NO PROBLEM!
.-= Debt Hater´s last blog ..Some Cash on Time to Help With Car Repairs =-.

Jesse October 19, 2009 at 4:43 pm

I have done it in spurts and I would suggest that the best thing to do is find the balance. I sprinted at the beginning and multiple times throughout the year but only when I knew I was close enough to a goal to make it before burning out. When I burn out, its very hard to get back in the saddle and sprint again so I have to make sure the steam will last till the goal is reached. Doing it this way, I get the rush from the accomplishments enough to keep going till the next one is in sight.

Great stuff today MrsMicah!
.-= Jesse´s last blog Business Card Giveaway Winner =-.

Cassie October 19, 2009 at 9:21 pm

When I had credit card debt, I always paid the minimums. I was selfish, and greedy, and wanted as much of my income to myself. The interest on the credit cards started building and building and I was soon paying almost half of what I owed in interest alone!

I eventually snapped out of it and started putting a huge portion of my income to debt (about 50%) just to get rid of it. It was hard, but so worth it!

Adam October 20, 2009 at 12:25 am

We’ve been pacing for awhile, but now that we’ve built up a comfortable safety net in savings, we’re going to keep our accounts at that level and dump the remainder at the end of each month into credit cards–essentially sprinting out of that debt. Once we’re done with those, we’ll be left with some relatively low-interest student loan debt, for which we’ll go back to pacing the payments.

Credit Card Chaser October 20, 2009 at 7:28 pm

I think that there are many different variables at play like the temperment of the people involved, the amount of the debt, etc. that will all have an influence on what approach is the best approach.
.-= Credit Card Chaser´s last blog ..BOA’s Credit Card Business is Losing Money Yet Still Catching Flak =-.

Revanche October 20, 2009 at 11:25 pm

Interesting … I was trying to answer this but realized that I don’t really fit into the gazelle (short term sprint) mode, nor do I like slow and steady. I like intense and constant when it comes to financial goals. It’s probably because the “intense” goal becomes internalized as “normal” after several months so it becomes reframed as performing at baseline, not over and above the usual efforts.

That reframing might be the only reason why I didn’t burn out over the last three years. [That and my family’s charming habit of presenting me with new challenges so I was never bored. ;P]
.-= Revanche´s last blog ..Please vote! =-.

CM October 27, 2009 at 1:30 pm

Last year I tried Nanowrimo, this time I’m doing it and finishing it! Good luck 🙂

Lise October 27, 2009 at 3:47 pm

I’m doing NaNo again this year, too! I’m psyched to begin – I have a really cool idea and there’s always such great support.
.-= Lise´s last blog ..Imagining Downsizing =-.

Mr. Not the Jet Set October 29, 2009 at 12:59 pm

We weren’t goats – we were gazelles! We did it for 20 months and in the process paid off around $40k.

It was hard work.
There were temptations every single day.
We couldn’t have done it without eachother.
But it was absolutely worth it.

It’s got nothing to do with your personality – it has to do with being fed up enough to say, “I’ve had it – I’m not going to live like this any longer!”.
.-= Mr. Not the Jet Set´s last blog ..How to Ruin Your Marriage =-.

JMK May 27, 2010 at 10:30 am

I prefer gazelle intensity with occasional sanctioned “falls off the wagon”. After trying various approaches it seems that any new cut or reduction to your spending is painful at first but with time becomes the new norm. Then you wonder why you ever felt you needed ___.

We’ve cut our spending down from what we used to consider “normal”. We don’t budget for entertainment, fun money, clothing for example. I tried that and found that once I allocated money for those things, I somehow felt entitled to them and spent the money not because I needed any of it, but because I’d set money aside for it. It was as if by including an item in the budget, I no longer had to pause and justify the actual purchase.

We only buy clothing when the kids outgrow something or we wear something out, so we only go into a store when we have a specific item in mind. No wandering the malls being tempted, and certainly no weekly clothing budget money burning a hole in my pocket.

We do the same thing with entertainment. We assess each invitation or opportunity on it’s own merits. If I had a set budget I’d be far more tempted to look for places to go. We have $x to go out somewhere this week, so where do you want to go? Frankly there isn’t somewhere I want to go every week, or even every month.

I’ve found that buy not having a set budget for things that rarely happen or are completely discretionary is best for me. I never want to get into a mindset where I think of weekly clothing/movie/restaurant etc purchases as “normal”. If necessary an annual pot of money to cover all of it might work. That would at least cause me to pause and consider if an item was worth it or if I should save it for later in the year.

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