Setting the goal

neil07

Hi,

I'm about to join you all with my first OP this month. I haven't set a fixed date for paying it off yet and I am looking for a bit of advice on setting this goal. You see, it seems to me that if you set a goal to OP by x amount per month in order to pay off in say x date in x month in 8 years time, then the danger is that it all becomes a bit... boring.

My fear is that if i set my goal I will get used to the OP each month and lose motivation. If I treat the OP's as a bit of a game - each month trying to pay more off, as I did this month, I may stay more motivated.

This may not make sense, but if anyone knows what I mean i would love your thoughts!:beer:

co123456

Small goals along the way for me. For instance, I want to owe 17K on March the 17th. No special reason, just a small number related target. One other trick I'm using at the moment is trying to eek out another 10 quid or so and thinking that it will reduce my monthly overpayment forecast. Not a great reduction, but instead of paying 1000 OP per month, I'll just need to find 999. It's a psycological thing. Oh... and here's how I plan:

Long term fuzzy planning: Never more than 12 months in advance
Medium term: Two months maximum with 80% of money movements forecasted.
Short term: Next payday (budget fixed two days before payday)

StuartGMC

Neil
See page 1 of my diary where I've summarised things since last May and the improvements made on repayment date; may give you an idea or two and note that you should have your OP on SO or DD (i.e it always goes in), then each month note the extra you add on top (maybe to round off the interest charged that month to a "whole" figure?). Then in month two, you still make the OP but challenge now is to increase the "extra" OP....

Then as and when you get a pay rise or reduce costs elsewhere; reset your normal OP to the new value you've been achieving and start again....

However, I think you will (eventually) reach a limit and this may be more demotivating than tackling your complete budget, having targets for OP, Savings,Investments, plans for new car, holiday etc etc I find that this multitude of things is sufficient, especially when you throw in unexpected costs, which you can cover from your emergency funds, but you really don't "want" to have to dip into them, so you now try to find this extra from within your existing finances....

Ohh, did I say it can get addictive too, especially spreadsheets :rolleyes:

I hope you find some ideas from the threads here which help you get moving for a few motnhs, thereafter it should be autocatalytic. Good luck with the journey.

neil07

Stuart - thats exactly what I needed, it allows me to push myself but also meet a basic OP

I have been amazed how much i saved this month, just by being more conscious of what I am spending on. Looking at the annual costs works so well:

example for me this mth:

Annual spend on beer from off licence = 800
Annual spend if 'homebrewing' = 240

StuartGMC

Neil
If you don't have a household budgeting spreadsheet, drop me your e-mail address by PM and I'll e-mail one to you. Mine shows the "position" per month of scheduled income against all the budgeted spend, plus you can include the mortgage etc to show actual net position.

We offset, which is a great incentive to overpay, save and also decrease the effective interest rate payable on the mortgage - mine is presently 0.75%

You may want to look at that option in future when it is appropriate to your situation.

neil07

thanks, but you sent it to me before!

i am on a .23 above base tracker until May 2010

neil07

and very useful it is too... although i havent got stuck in totally yet

StuartGMC

Neil
Sorry, I've sent out quite a few copies and lose track of it.... well, it sounds better than saying my memory is going, especially at my age (43!)

neil07

no problem:D

i guess the logic is that once cost efficiencies are at the max (which is some way off) its time to increase income possible