Put 2021 on the Fast Track with a Financial Fartlek

Dear Readers,

Want to try something different in the New Year? How about fartlek training? It's a pretty funny word for a serious way runners can train for a marathon. Don't get me wrong, I'm not suggesting we all become long-distance runners. In fact, I tried running for about a year and can't say it was for me. But the concept of going the distance does resonate with my beliefs about saving and investing.

You may have heard the analogy that investing is a marathon, not a sprint. And I certainly agree. But the problem with marathons for a lot of people is that they're tiring and can seem daunting. A sprint is much more invigorating and doable by comparison. That's where fartlek training comes in.

Fartlek—a Swedish word meaning "speed play"—is a training method in which you vary the terrain and pace to decrease boredom and boost your psychological energy. It brings the thrill of a sprint into your run to increase your stamina and help improve your pace so you can reach your long-distance goal faster. So why not apply this idea to reaching your long-term financial goals? I think it could work—and be kind of fun.

Boosting savings short-term can help you reach your long-term goal

I always encourage a long-term view when it comes to saving and investing. Set a goal, save and invest steadily, and over time your chances of success are pretty good. At the same time, it's kind of exciting to give your savings a boost when you can.

For instance, let's say you regularly save $50 a week. How about going for $100? It may sound impossible, but give it a try for 30 days. With some mindful budget trimming, you might find it's easier than you think. Whether it’s not ordering out dinner for a month or cutting back on online shopping for a few weeks, try it. Maybe it’ll become a habit!

Plus, use financial windfalls to speed things up even more. Did you get a bonus? Congratulations. Now put at least a portion of it towards your goal. A recent raise? Great. Up your 401(k) contribution. It’s exciting to see your balance go up in the short term—which might just give you the extra motivation you need to stay on a steady course for the long haul.

And while you're focusing on saving, don't forget about using some of any extra money to pay down debt. Those constant monthly bills can really slow you down.

Varying your pace keeps you going

One of the reasons fartlek training works is that it's free-form and flexible. You set your own sprint intervals, create individual interim distance markers, and are guided by your own circumstances. You choose what's going to best motivate you at the time. I think that same approach can work for building your savings. 

For instance, maybe you've set a certain monthly savings rate for yourself. You're doing well at keeping it up for several months or even years, but then something happens. A job change, an illness or an unforeseen event (we can certainly relate, having just lived through 2020!), and you have to pull back. Okay, change your pace. Prioritize your more pressing short-term needs while keeping at least a minimum aimed at your long-term goal. Then when things turn around again, maybe you can increase your savings rate for a certain period of time to get back on track.

By varying your pace, you keep the discipline of saving while at the same time adjusting to your current circumstances. And when you've accomplished a burst of savings, you might even reward yourself after you've reached that next milestone.

Remember, it's your own personal race

The thing about saving and investing is that it's your own personal marathon. You're not competing against anyone else. It doesn't matter how fast someone else is saving, how aggressively they invest or what kind of returns they get.

And it's your own personal finish line. Others may be trying to time the market to get ahead faster, but don't be tempted to follow them. Keep your eyes on your goals, set your own success markers, and have the confidence that you can keep going whatever the ups and downs. Will you have moments of doubt? Of course. When you need some encouragement or a little extra coaching to stay the course, consider checking in with a financial advisor who can help you refocus and recommit.

A financial fartlek is easy to do and can help make up for lost time

The idea of a financial fartlek might make you smile, but it can also be a great motivator. Slow and steady is a tried-and-true strategy, but changing things up, adding in short-term goal markers and picking up the savings pace now and then might just increase your stamina and get you to your financial goals even faster. If you were slow to start saving, increasing what you can sock away even for short intervals can help make up for lost time.

And it's totally within your control. If you can't always hit your mark short-term, re-set your timing, slow down when you need to, and challenge yourself to accelerate your savings when you can.

Running a marathon takes constant, steady discipline, but adding in a few sprints can make it more fun and more productive. Take that attitude toward reaching your New Year's financial goals, and that finish line may be closer than you think.

Have a personal finance question? Email us at askcarrie@schwab.com. Carrie cannot respond to questions directly, but your topic may be considered for a future article. For Schwab account questions and general inquiries, contact Schwab.