Small Changes, Big Results


While we are walking out financial responsibility and building new money habits, we can get discouraged by lack of quick progress. We may think that now, because we are making better choices, things should magically get better overnight. Our raise would finally come, our investments would start taking off, or our savings account would start growing at an unreasonable rate.


Most of the time, these quick fixes don't happen.


That gets discouraging. However, that is because we are looking at it with the short term mindset of "I need it right now." Significant change doesn't happen overnight. It takes time and slow, almost imperceptible movement. If we were able to watch the Grand Canyon get carved out by the Colorado River, we would be watching it for hundreds of thousands of years, if not millions!


I believe there is hope though. Allow me to give an example to help shift your mindset out of "right now."


Say you commit to stop going to Starbucks for a morning coffee. Let's say also that your usual coffee is $5. Also, you only really go on a weekday morning as part of your routine for work.


$5 per day does not sound like it will make a big difference. After all, you make much more than that every hour of work most likely. Let's see how that plays out over the course of a month.


$5 per day * 20 days per month = $100 per month


Over the course of one month, you should have saved $100 from this one small change. Still not the largest difference in the world, but still enough to perhaps go out to dinner once more without guilt. Or it is $100 more than could be working for you in savings or retirement accounts. I will show that impact shortly.


Now, over the course of a year, what would that $100 get you?


$100 per month * 12 months per year = $1200 per year


How could even $1200 make a difference in your life? What if you put it towards education to better yourself and improve your career? What if you were putting $1200 per year away for retirement instead of drinking it away? If I were to plug in saving $100 a month into an investment calculator and set it at an average of 5% interest over 20 years, compounded monthly, below is what you could have instead of a daily coffee:


$41,274.63

(https://www.calculator.net/investment-calculator.html if you want to do this exercise yourself!)


While the lack of big progress can be discouraging, the benefit is in the consistency over a long period of time. You likely won't see a big difference today, next month, or even for the rest of this year. However, in 5 years or more, you may find yourself in a money position you thought impossible.


Keep going. Don't give up. Future you is counting on you.