One thing that I've learned over the past year is that the smallest of decisions can affect your financial life in a big way. In the short term making the choices to initiate small changes in your saving and spending habits may not seem like it will make much of a difference, but when the decision is made and followed over the long haul, it means big changes can and will happen. You can turn your life around.
Dave Ramsey describes the determination to make the small choices this way:
You are willing to do what it takes today in order to win tomorrow.
Making small choices today may mean that your life may be slightly more stressful, or that you can't enjoy some of the luxuries that those around you are enjoying. It isn't easy, but small choices translate to big results.
How do you find the small things in your life that you can change? By setting up a plan, doing a family budget and finding out where your needs and wants are. As the old saying goes:
People don’t plan to fail, they fail to plan.
When looking at your wants, you'll quickly find that you're probably spending a lot of money on things that you don't need. Time to make some small decisions!
One example that people always bring up is a daily coffee habit. When you look at getting a daily coffee, it really doesn't seem like it would make much of a difference. It's only $3-5 a day! But if you decide that you're no longer going to get that coffee at starbucks, and instead drink the free coffee at work, you can end up saving hundreds of dollars every year. Making a small change in your routine will save you big money!
Another example that has really come to the surface in our family's spending is our budget for dining out. We tend to eat out several times each weekend, and that small spending every week adds up to hundreds of dollars every month, and thousands every year. We made a small decision to cut our restaurant spending in our monthly budget, to only eating out a few times every month instead of several times every week. That small change is already translating to big savings. We're saving hundreds every month from this one small change.
Small Steps To Big Changes
So how should you go about finding those small things that you can change in your own financial life? Follow these steps:
- First take care of your four walls: Food, shelter, clothing and transportation. These things are all necessities and need to be paid. These are BIG things that you can't scrimp on.
- Find out where you are currently spending money: When you track your spending for a month or two, you'll quickly find out where you're spending too much money, and maybe where you're not saving enough. Plan to make changes in those areas.
- Start doing your family budget: Set up a family budget where every dollar is allocated to either a spending or saving category. Allocate less money to problem areas in your budget where you know you're spending too much. A small change here and a small change there will translate to big savings!
- Stick to it: Stick to it over time, and you'll be happily surprised at how much money you're saving just by making a few small changes in your spending habits.
We're still working on our budget from month to month, and we know there are still plenty of small changes that we can make that will help us as we go forward. We'll continue making those small decisions and we know it will springboard us towards success!
Have you made any small changes in your financial life that have translated to big results? Tell us about it in the comments!