When you commit to paying your home loan off faster, it can be very easy to lose track of that goal. Five, seven or ten years can seem like a long time in the first six to twelve months of your home loan. Or even in the first month!
Paying your home loan off faster comes down to being mindful about the way you spend and save money, and how you track and adapt to your home loan situation during the life of your loan.
Some of this comes down to having healthy money habits.
But what is a money habit?
Money habits are those little things you do in life when you spend, save, track or manage money.
Everyone buys something.
Everyone spends money.
It’s those habits around how you spend your money and how you look after your money that matter.
Those habits might be so automatic that you don’t even notice doing them (like buying something from that delicious smelling bakery you just happen to walk past every day).
When you have healthy money habits, you take better care of your money. These habits help you to pay your home loan off faster, they help you save, and they help you manage your money.
What are your everyday habits?
Everyone can create healthier money habits.
Everyone can create better habits in general.
Everyone already has some form of helpful habits in their life (these can be completely unrelated to money). The trick is to harness these helpful habits for creating your own healthy money habits too.
Think about this, what is something in your life that you commit to no matter what.
For example, do you commit to eating healthy on Mondays, do you commit to exercising two or more days per week, with specific times you do that (such as Tuesday and Thursday mornings). Do you commit to getting to work by 8am (or another time) every day or every other day? Or do you no matter what, make sure the dishes are done before going to bed?
What do you do every day; without fail?
Everyone has something they commit to without fail, even if it’s as simple as getting up and getting dressed.
Everyone has little rules or agreements with themselves they live by and everyone has different rules or agreements.
Everyone has helpful thoughts that motivate them to maintain those rules or commitments.
Everyone has them.
Everyone has habits.
Pre-COVID, once a week I used to leave for work at around 6.20am and every time I did that, I would see hundreds of people also going to work. Some of these people woke up early to exercise before they left, some to pack their kids lunches before they left, others to study before they set off for work, and others did all of the above.
Something got them out of bed.
That something was habits.
That something was the little commitments they set for themselves to make sure they would leave on time. That something was the helpful thoughts willing them to get up early and go. The little reminders that got them to get out of bed. Maybe it was a helpful thought framed in a positive way, like:
- I need to get up so I can spend more time with my kids and pick them up this afternoon; or
- it’s exercise day, I need to get up and exercise before work so I can be in a good frame of mind at work.
Or maybe it was a thought that was framed in the negative but still willing them out of bed or to do something else. For example, “If I don’t get up, there will be no-one at the bus stop to meet the kids at pickup, and who knows what will happen? So I have to get up no matter what!”, “If I don’t get up I will lose my job!” Or even “If I don’t eat healthy, my trainer is going to make me pay for it!”
No matter what, there are thoughts continually going on in our brains. Some of those thoughts are helpful and encourage us to do what we commit ourselves to do.
Those thoughts can be your motivation.
When we understand our everyday habits, and we start to look at what motivates us to do those behaviours, we can start to understand what motivates us and how we can use this to establish helpful money habits that can help us to pay our home loans faster and potentially save hundreds of thousands of dollars.
Uh, oh! What about our bad habits?
Just like good habits, we may have bad habits too.
We all have bad habits, or unhelpful rules or thoughts that encourage us to skip our commitments or that lead to bad habits forming. For example, letting ourselves miss that exercise class, drinking that extra glass of wine, or leaving the dishes in the sink overnight.
We may even have unhelpful money habits that we’d like to do better with.
The good thing is, we can change them.
It is possible to create better habits and break unhelpful ones.
Everyone has little rules or agreements or commitments that they live by; and everyone has different commitments.