Peace Mitchell, Co-Founder, Women Changing the World
“As a child one of my favourite possessions was the big glass jar I kept all of my tooth fairy and birthday money. I would delight in tipping it all out over the floor and counting out all of the coins and notes. It brought me so much joy. I loved counting and saving it more than spending it. It felt precious and something to treasure and be proud of not something to waste.
My mistake was showing my friend from next door though. She also loved counting my money with me. Our family lived interstate so we would visit them in the school holidays sometimes and one year when I came home I was devastated to find the jar was gone. Not one cent had been left behind.
On that day I learned that money was something that could be lost and no matter how much you have or how long you had been saving so carefully for it could all disappear at any moment and when you were least expecting it.
I think this pattern has then played out in my life in other ways. Saving money and then self sabotaging by spending it or giving it away too freely. Feelings of scarcity persist from my childhood too and have been something I’ve had to work through as an entrepreneur.
When I have a goal I’m good at working towards it but I need complete focus if I hold the goal loosely or too casually I’ve found I’m less likely to reach it.
At the moment I’ve set a goal to pay off our mortgage. We’ve owned our home for 22 years and yet progress on paying this off has been very slow. We’ve raised 4 children in those 22 years, moved interstate and lost a business during covid and all of those things have impacted us financially but I realised if I didn’t take action on this it would be another 22 years of slow progress (and high interest!) before I knew it.
I’ve read lots of finance books over the years and they’ve all definitely helped me on my financial journey but interestingly the book that helped me the most has been Atomic Habits by James Clear. In this book he talks about being 1% better and the power of small steps every day. So I applied this theory to my financial goals and I’ve been blown away by the results.
In just 12 months I’ve now paid off 50% of my mortgage!
Here’s what I’ve learned:
1. Small steps add up - even allocating $10/day for 365 days is $3650. Stay focused on the big picture by taking it one step at a time.
2. Automate it- if you can save without thinking about it you can stay consistent. You’ll have to work out how much you can allocate to set aside each day/week/month without falling short of your general expenses, it doesn’t have to be a lot. I find having an account you can’t redraw from easily is essential and then setting up automated payments into that account that happen daily or weekly on pay day or both!
3. Have a back up plan - It was tempting for me to put all of the money on the home loan so I could reach the goal faster but once I’d put a stop on withdrawals it meant I couldn’t dip in for emergencies. This is great and why I’ve saved more but it’s still important to have money for emergencies. I have an account that I keep topped up with some spare money for paying bills and unexpected emergencies that way I know we’re okay if things get tight but I’m not tempted to take money out of the mortgage.
4. Don’t think about how far you have to go, celebrate how far you’ve come! Setting and celebrating goals is so motivating! Every step of the way I was proud of myself for setting my life up for my future self and our family. Rather than being sad about how much debt we had I focused on being excited about being closer to that goal every day.
5. Ask for help - I called and went to both of my banks and talked about my goals. I asked them how they could help me. Some of the things I said I already knew but there were other things they told me about that I had no idea about and helped me reach my goals faster - like reducing my interest rate and putting a stop on withdrawals.
6. Stay focused - I check the balance everyday. When I reach a milestone I work out the percentage I’ve paid off, I also track the numbers and set calendar reminders. I mostly use my phone calendar and have a simple daily calendar reminder that I edit each time I reach a $1000 milestone but I know there are so many tools and financial trackers out there to help you, so find the ones that work for you and motivate you to be accountable and stay consistent.
7. Make it fun - you don’t have to write ‘account transfer’ in the transaction description. You can write whatever you want! Some of my favourites are Abundance, sparkle or magic! I’m sure the people at the bank reading my statements must think I’m crazy, but it makes me smile. Do you love numbers? How about scheduling payments of $8.88/day or $5.55? Simple things like this make it fun to do finances. And when it’s fun it gets done.
I’m excited to keep going and I’m hoping to reach my goal of being mortgage free by the end of the year but even if it takes two years I’ll still be in front!”