How Small Changes Can Revolutionize Your Finances

Small financial changes meet you where you are and help you transition into who you want to be.

Photo by Suzanne D. Williams on Unsplash

New decade, new year, new you, right? Maybe.

Let’s be real 99% of the time when we make New Year’s Resolutions, they’ve gone out the door by February if they haven’t already fled the building. We mean well when we make them and we fully intend on following through on them.

So why don’t we?

Why we don’t stick to our resolutions

There are lots of reasons we could pinpoint. Right now we’re going to focus on the size of our goals and the drastic change in behavior they often require.

Let’s say you decide that you’re going to pay off $10,000 of student debt this year. You don’t make much money, so you need to scale back to put whatever you can towards it.

You decide that to do that, you are going to do the following:

• Stop eating out
• Only make coffee at home
• No concerts/games/theatre this year
• Only watch movies rented from library
• Cancel streaming services
• Cancel internet
• Only get books from the library
• No new clothes

You may have inhuman amounts of willpower and can follow those rules with ease. The rest of us mere mortals would last maybe a week.

These are all good ideas on how to save money that you can put towards your debt. However, if you’re used to eating out a few times a week, not eating out for an entire year is going to be massively challenging. The same goes for any of the above things on that list.

The changes are too big to be sustainable and that’s a big part of why we end up failing.

How small changes help

Let’s focus on the 1%. On the micro habits and changes that you can make that add up to something much bigger.

By focusing on very small changes, you hit the low hanging fruit first. The stuff that’s easy to change and doesn’t feel like it’s having much of an impact on your life as it stands.

This is good because if you don’t really notice the changes, if it doesn’t feel restrictive, it’s easier to keep it going. This becomes a sustainable practice.

Let’s be real here for a second, big, sweeping changes are for people who aren’t willing to commit to the daily ritual of change. Small changes meet you where you are and help you transition into who you want to be.

The domino effect of small changes

Small changes can seem silly. They should, in fact, seem silly. These changes should be so small that you will laugh to yourself or at me and think that it’s not enough.

But here’s the thing, these small changes have a domino effect.

As Dorothy Day once said, “People say, what is the sense of our small effort? They cannot see that we must lay one brick at a time, take one step at a time. A pebble cast into a pond causes ripples that spread in all directions. Each one of our thoughts, words and deeds is like that. No one has a right to sit down and feel hopeless. There is too much work to do.”

She was right then and she’s right now. There is too much work to do for you to wallow about not being able to make big changes.

So you can’t throw an extra $200 at your debt each month, so what? Can you throw an extra $2 at it?

I promise it will make a difference, even if it seems ridiculous at first.

Say you have a credit card with a $1,000 balance and a 16% interest rate. Your minimum payment is $25 a month and you’ve been paying that. By adding $2 to that payment each month (bringing it to $27), you will pay off that debt 6 months faster than if you had just paid the $25 per month.

If you could get your payment up to $30, adding just $5 — you would shave off over a year of payments.

Small changes add up.

Here are some ideas of small changes to get you started:

• Order a small instead of a medium coffee.
• Bring lunch once a week. Increase this every so often until you’re eating in more than you’re eating out.
• Cycle streaming services so you only have 1 at a time/share (and share costs) of streaming services with those who have your login.
• Put $1 per paycheck into your savings account. Add $1 each pay cycle. If you get paid bi-weekly, the max you’ll put away is $26, but by the end of the year, you’ll have saved over $350.
• Add $5 to a debt payment each month.
• Switch to store brand items. The majority of the time, they’re the exact same thing and put into different packages at the factories.
• Take advantage of warehouse stores. If you have a Costco or Sam’s Club, go with a friend or a few friends and split the costs of things you don’t have room to store all of like giant packs of toilet paper and paper towels.
• If you need clothes, try thrift shops first. Used clothes are better for the environment and the price tags are definitely better for your wallet.
• Better yet, if you have friends around your size, see if anyone would be up for a clothing swap. That way you all get to freshen up your wardrobe without having to spend a dime.
• Unsubscribe from store emails, or at least lower the frequency.
• Create a list before you go shopping — it will help you stay focused and less likely to buy things you don’t need.
• If you go out to eat, don’t order a drink.
• If you order a drink, opt for a well drink or beer instead of a cocktail.
• Invest in a reusable water bottle that you will actually use so that you don’t buy bottled water.
• Switch from dryer sheets to reusable dryer balls. Also better for the environment.
• Turn off your surge protectors/unplug some electronics before you leave in the morning to save on electricity.
• Use GoodRx to find the best price for your prescriptions
• Renegotiate your cable/internet bill — you can usually get a lower promotional rate for 12–24 months and then renegotiate again from there. Always ask to cancel your services, the retention team can offer better rates than customer service.
• Unfollow stores on social media.

A caterpillar doesn’t transform into a butterfly in one fell swoop. There are a lot of stages and steps along the way.

But if a caterpillar ever tried to go straight from caterpillar to butterfly without any of the other steps, it wouldn’t go very well.

It’s time to start doing the work. So tell me, what small change are you going to make?

Originally published on reel-cents.com on January 19, 2020.