Do you ever wonder if change is possible? Many people are seeking a big change in their life. They want to go from $200,000 in student loans to paid off. They want to see a $1,000,000 in their retirement accounts. If it were easy to “change” these accounts overnight, everyone would be doing it.
One small step for a man is one giant leap
People overestimate how much they can accomplish in a day and underestimate how much they can accomplish in a year.
This is even harder for us humans when you stretch out the time to decades. I’ve yet to meet more than a handful of people that can think in terms of decades. Everyone is too busy focused on the here and now. And it makes sense doesn’t it? Ancient humans had greater concerns than their future “retirement” or making sure their “investments” were optimized for “taxes”.
But times have changed.
Modern humans can plan for the future and most want to get their as fast as possible. Little do people realize that in order to save $1,000,000 you must also save $100K, $200K, etc. Every big change is just a series of smaller changes broken up over time.
And yet people wonder all the time if change will happen in their life.
How about this? Change is inevitable. Your financial life is changing right now, whether you’re earning more/less/preparing for children/have children going to college – it’s all changing. The incremental changes are just too small to notice. And yet we’re all aware of their accumulative effect on the big picture.
How to build incremental changes
If incremental changes are happening no matter what, have you thought about what you can do to make those changes for the better?
In other words, if you want to build financial freedom, what can you to do today? It’s the simple question that motivates me every day: what can I do today to advance my goal?
I’ve found that this policy of making small changes in your life results in big accomplishments over time.
I’ve also found the opposite to be true: most times I set out to change everything in one day, I fail.
What can I do today?
How about you turn off cellular data for Spotify/Apple Music/Podcasts (with a goal to cut your cell phone bill by using less data)?
How about you print out the enrollment forms for your 401K and leave them on your desk (with a goal to sign up)?
How about you change your W-4 to 0 withholding today to ensure a $5K tax refund (with a goal of using it next year for a Backdoor Roth IRA)?
How about you cancel one subscription service that you’re not really using?
How about you fill in a few details and see what rate you could get if you refinance law school loans?
How about you find your most recent resume and you update one thing on it?
How about you make your lunch for just today only?
How about you wake up 10 minutes earlier tomorrow morning?
How about you cut your Internet speed by one tier level as a test for a month to see if you notice a difference?
How about you read one blog post about taxes?
How about you request your free credit report?
How about you create a Google spreadsheet listing your student loans?
How about you purchase some LED light bulbs and replace your incandescent bulbs this weekend?
How about you sign up for a library card?
How about creating a Google spreadsheet listing each monthly and annual service you subscribe to?
How about acknowledging that you do spend money around the holidays and setting up an automatic monthly transfer to save $50?
How about asking your Human Resources department if you’re eligible for a Health Savings Account and what you’d need to do to open one?
How about purchasing some boxed wine to see if it’s as good as the $15 bottles you’re picking up?
How about having two drinks when you go out tonight instead of three?
How about opening an account an Vanguard?
How about opening an account to save for a future car purchase?
How about looking up your mutual fund annual fees?
How about asking payroll to split your paycheck by putting $100 towards a saving account and allowing everything else to go into your checking (knowing you will eventually figure out a better balance)?
How about delaying one purchase you were going to make today for one week to see if you still want it?
Joshua Holt is a practicing private equity M&A lawyer and the creator of Biglaw Investor. Josh couldn’t find a place where lawyers were talking about money, so he created it himself. He spends 10 minutes a month on Personal Capital keeping track of his money and is always negotiating better student loan refinancing bonuses for readers of the site.