Small savings add up

Saving a few dollars here and there eventually add up to big numbers. The key is making these small financial steps a daily routine, Hamm writes.

Muhammed Muheisen/AP/File
A bird used by a Chinese man, unseen, to perform, holds a yuan collected from a tourist as it prepares to drop it into a piggy bank, in Houhai district, in Beijing, China, in this May 2010 file photo. Hamm recommends getting in the habit of making small savings everyday.

Most of the frugal steps I take in my life are little steps. I drive the speed limit on my way to a friend’s house, which saves me fifty cents and gets me there a few minutes later. I eat leftovers for lunch. I put together a meal out of what’s on hand instead of heading immediately to the grocery store. I spend a few hours playing frisbee with my children in the yard.

They’re all little steps. They each save a few cents to a few dollars. Individually, they don’t radically change my financial life. They’re just good little choices.

The end result of these little steps is a bigger checking account balance than I might expect. That’s a very nice thing to have.

I remember quite well the feeling of looking at my checking account balance and realizing I didn’t have enough to cover the bills. I haven’t had that feeling in a long time.

Of course, having a surplus in your checking account can be a pretty big temptation, too.

You look at that bank statement or that ATM receipt and you can’t help but think things like “I could afford that new phone” or “Let’s go out to eat at that expensive restaurant next Saturday.” You’re standing at the store, looking at some items you might not have otherwise purchased, and that nice checking account balance pops into your head, and so you mentally give yourself permission to make that purchase.

If you do this, those little steps go to waste.

Sure, the things you’re spending your money on might be a nice short-term perk, but all you’re doing is shifting your short-term perks around. You choose to eat leftovers a few times, then you eat out a few times when leftovers would have been fine. You spread out your grocery store visits, but when you go there you buy a bunch of things you don’t need.

If you’re doing these kinds of things, it’s just one step forward followed by one step back.

The little steps can make a life-altering difference if you’re not constantly undermining them with your other choices. Choosing to do something financially sensible doesn’t help if it’s followed soon by a choice to do something financially foolish.

If you want to have financial success in your life, the “good” financial choices need to become the routine and “normal” ones. The financially sensible choice is the one you just do by default, and the financially foolish ones are the ones that seem abnormal. The potential mistakes are the ones you think about very carefully and usually put aside.

If you reach that point, the little steps lead you straight to your financial goals.

So, how do you reach that point? Practice. Consistently make the good choice. Find things that bring you joy in your life that are also financially good choices. Try things you’ve never tried before that are financially reasonable and, if they’re enjoyable, add them to your life.

The more you do these things, the easier it all becomes. It becomes natural, and when it’s natural, it’s normal to always do it that way.

If the financially sensible route is the natural route, then you’re going to find yourself taking steps forward without taking steps back. You’ll find yourself with a checking account balance that grows, and that’s followed by debts that shrink.

The little steps seem hard at first, and they can seem “un-fun.” Keep at it. Focus on making the financially sensible choice at every opportunity. Seek out things that are both fun and financially sensible and build on them. Before long, they’ll all seem normal.

When that happens, financial prosperity will begin to seem normal, too.

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