Earlier this week I saw a public announcement about weight-loss starring Al Roker. The premise of the announcement was that small changes over time often have a better chance at succeeding over major ones that happen in a short period of time. Although I’m sure this announcement was a veiled attempt at promoting his new book Never Goin’ Back: Winning the Weight-Loss Battle For Good, the message did resonate with me.
I am a firm believer in the idea that small changes taken over time can create awesome benefits in your life. Through trial and error I have discovered that this is a method that works for me in my own personal finances. In the past I have attempted to implement several large scale changes in a short period of time with results that were less than impressive.
For me, making a few small changes over time have worked because it’s easier to work them into my daily/weekly schedule. After a few weeks of following through with these changes they become part of my routine and I no longer have to actually work at them. Once I’ve achieved this stage I can move on and work on something else.
Whenever I attempted to make several large changes at once, I always became overwhelmed. There were too many things to try to fit into my schedule and therefore, usually nothing made it into my routine.
Building Your Financial House
The old cliche about Rome not being built in a day can be a great metaphor for improving your financial situation. Many times when we’ve lived a financially irresponsible lifestyle we go off looking for the quick fix. However, everyone’s financial situation is different. While finding a quick fix in one personal finance book might seem to be the answer, you may find that the author’s particular style doesn’t fit with your lifestyle.
Instead you should think of improving your financial situation like building a house. When building a house you don’t run around trying to construct a roof without first pouring a solid foundation. Personal finances work in much the same way. Trying to focus on building an emergency fund, creating a realistic budget, saving for retirement, and paying off debt and starting a side business all at once won’t get you very far. In the end there is a good chance that, in the short-term, you’ll be unhappy with the results and stop trying all together.
One of the very first steps to building a house is to create a blueprint. Without a plan to go by a builder wouldn’t know where to put the doors, windows and electrical outlets. The same holds true for building your financial house. Before you set off trying to achieve your financial goals you need to know what they are. You may have a general idea of what you want, but there may not be a timeline. Also, how do your financial goals lineup with your partner’s?
You may want to retire early and travel the world. Your spouse may feel differently and wish to stay home with the children and homeschool them. It is important to discuss your goals with your partner so that you can both have your say. It’s important to have an open financial relationship with your spouse to prevent resentment and other feelings from surfacing down the road. Once you have your goals figured out you can now focus on those that will allow you to reach them.
The Steps Don’t Have to Be Big to Matter
The steps you take to improve your financial situation don’t have to be major. Building an emergency fund, saving for retirement, paying off debt and creating a budget are all very important. However, don’t forget that the small things you do matter as well. Every month I like to create a list of smaller goals that I would like to start or accomplish for the month. They’re like New Year’s resolutions, only on a smaller scale. Some of the monthly goals I’ve had in the past include:
- Switching life insurance providers.
- Match coupons with store sales.
- Remove any unnecessary cable expenses.
- Change from incandescent to CFL bulbs.
- Stop using disposable one-time-use items for more permanent solutions; cloths instead of paper towels, reusable cups instead of disposable bathroom cups and microfiber cloths instead of disposable Swiffer cloths.
These small changes may seem insignificant. In fact, some only save a few bucks per month. However, overtime these changes can really add up. By implementing those five changes in my budget I’ve managed to save a few hundred dollars per month.
What small steps have you made to improve your financial situation? Has there ever been steps that haven’t helped?
Photo Provided By: 401 (k) 2013