Start Small for Big Savings

“Wealth is largely the result of habit.” ~John Jacob Astor

If I could tell my younger self one piece of advice that would help create a life of financial independence it’s this: ‘Small expenses make a huge impact on your saving and spending habits.’Small expenses can have a big impact

Saving money consistently starts with self-discipline in your spending. When we routinely spend money today – whether it’s $5 for a coffee, $15 for lunch or $20 or more for dinner and drinks with family and friends – we are essentially robbing ourselves of our future. I’m not saying you should cut those expenses out altogether, I just believe that you need to be more conscientious of what you are spending on and how much those things add up to on a weekly or month basis. Start saving on small things, and you will end up with big savings!

If you want to start tracking your expenses, check out my post. It’s something that can be a huge eye-opener to most people on how much they are really spending on all those luxuries that seem so insignificant at the time.

For example, cut out the daily coffee habit and save $5 a day – in 20 years you would save about $80,000 if invested at 7% (average market return). The true value of compounding is awesome. Reduce your grocery spending and restaurant spending by $100 a week and you will have about $150,000 in 20 years.

People waste so much money on random stuff they don’t even realize the true financial impact. I’ve seen folks just throw down their credit card and not even look at the bill; or they sign up for Amazon Prime and keep buying things that seem really cool at the time because… well, why not?

Little expenses can sink a great ship.
Little expenses can sink a great ship.

“Beware of little expenses. A small leak will sink a great ship.” Benjamin Franklin

There are many little things that impact our financials on a daily basis – small changes in your Utilities, Groceries, Entertainment, Travel, Transportation. It could be $5 here, a few dollars this, and a few more on that… it really all adds up. Think of those times you get your credit card statement at the end of the month, and you’re like “WTF? Why is it so much?” Then it becomes out of sight, out of mind.

Making small changes will create a habit. Your habit will soon become a routine that operates on autopilot. Thereby when a decision presents itself to you, the choice is easy – you choose to save instead of spend because that is your habit. It becomes harder to spend your hard earned money and easier to save money. Make one small change today and your future self with thank you for it! 

4 thoughts on “Start Small for Big Savings

  1. Big things start small and building wealth starts from saving small. An encouraging post which is a fine reminder for anyone who needs inspiration to start saving, especially for youngsters. There are charts which outline how much you have to save for the different ages in order to save a certain amount of wealth at age 65. So you can include it in your post for a more convincing case to save early.

    1. That’s a great idea! I will be doing a follow up post on how much to save at various ages and where you can find different ways to save. Understanding how to save early can be very inspirational for people that just need that extra push. Thanks for your comment and suggestion!

  2. Everything you write about here is so true! I used to be terrible at buying a coffee every day on my way to work and going on amazon to buy something and then buying 3 or 4 things…….

    Now I have quit my full-time job and am only working part time, it’s so important for me to be careful with my money now! I have really changed my habits and make coffees at home now, only buying one less than once a week. This really makes a difference! So it’s so true what you say about the small expenses making the biggest difference.

    1. It’s amazing how many “little” things we can buy every day and not even realize it. However, when you take a step back and add them all it can be so surprising. I’m happy to hear you started changing your habits to spend less. That’s where it all starts – small habits, small expenses make the biggest difference! Thanks for sharing your experiences.

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