Kara asked me how we stay motivated now that we're debt free. I'll confess. This has been a little bit of a challenge for me. The first month after we were debt free we lightened up a lot and celebrated a little - mostly by going out to a couple nice dinners. Then we got focused again, determined to have our fully funded emergency fund before the end of the year. Once we hit that milestone in September, we sort of lightened up a little again. We didn't stay as gazelle intense as we had in the past, but we didn't just "blow" our money either.
As we were going through the process of becoming debt free and building our emergency fund, Tim and I talked about some of the things we have wanted for a while and put on hold. We decided that we would allow us to buy a couple of our wants as rewards for our hard work. We each moved an item from our wish list to the top of the list we keep for our "extra" income (i.e. my income and Tim's bonuses). We budgeted for a new camera and t.v. Along the way we had 2 other wants come up, but luckily we had some wiggle room in our budget to accommodate them - stove (because ours went out) and home gym (because it was cheaper than us both joining the gym).
So far, we've been able to get 3 of the 4 items. I ended up finding the camera I wanted on e-bay for half the cost of buying it new. Tim found the home gym on Craig's List for a fraction of the cost of buying it new. We also splurged on a new stove and got the type that is a double oven built in to the standard range size. While those can cost up to $1500, we shopped around and found one for about $750. All in all, we've been very pleased and have gotten good deals by shopping around and paying cash. Our last item is the t.v. We're taking our time to figure out what we really want and will be taking advantage of the holiday sales.
So... as you can see, our spending has gone up recently. Even though we've splurged a lot, I wouldn't really say we've lost focus or motivation. We still track every penny. We still shop around for the best deals. We still plan for every thing (including our splurges). Each step along the way, I think we find a new motivation. When we were on Baby Steps #2 it was becoming Debt Free. When we hit that milestone, it was getting our fully funded emergency fund. Now that our rewards are done, we're pushing ourselves in new ways. I'll be writing more in another post about our 2010 goals, but in general it includes investing, planning ahead, and giving back. All the things Dave encourages with Baby Steps #4, #5, and #7.
I think the best way to stay motivated is to continually adjust your goals and redifine your focus. One of the reasons the Baby Steps worked for us is because they were attainable, measurable goals. As we check off each step, it's empowering and really helps you build momentum toward your next goal. It's a fluid plan that changes as your life changes... it grows as you grow.
Oh, and by the way... I think it's okay to reward yourself along the way, too, as long as you plan for it. Maybe that's me justifying things, but as long as it doesn't distract us or keep us from our bigger goals than I'm okay with it.