Creating Small Wins

When it comes to achieving financial goals, many can seem quite daunting. So daunting in fact, that many people simply choose to ignore their goals altogether and just hope for the best.

This is not the strategy you can afford to take when it comes to your finances. How then, can we get started?

By creating small wins.

“Every day do something that will inch you closer to a better tomorrow.” - Doug Firebaugh

Let’s take the goal of retirement for example. When you are starting out with $0 in retirement savings, the thought of accumulating $1,000,000 or more is too much.

Likewise, if you haven’t bought a pair of running shoes in 10 years and want to run a marathon, you may just never start running.

Retirement Saving

We’ve talked about it here before, but one of the more common questions I get is “where do I start?”

If you need to save 20% of your income towards your retirement goal, how do you get there if you are living paycheck to paycheck? Start with saving 1%.

By saving 1% today, you will have inched closer to a better tomorrow. Three months from today, increase your saving to 2%. And then another three months later increase to 3%. Within five short years (it will be here before you know it), you will be saving 20% of your income.

Do you receive a raise at the end of the year? If you receive a 3% raise, use 1-2% of that raise to increase your retirement savings. This way, you will give your retirement contributions a boost, and you will still see a bigger paycheck in your bank account. The best of both worlds.

Reducing Expenses

Do you need to make cuts to your standard of living in order to achieve other goals? If you feel like you are spinning your wheels trying to control your spending, just take it one item at a time.

Make a list of recurring expenses and take a moment to consider how you might go about reducing that expense.

Paying $100 per month for cable - call your provider and ask for a discount or cheaper offering. Or cancel altogether and utilize “skinny cable” packages for $35 per month.

Paying $150 per month for cell phone - call your provider and ask for a discount, or switch to a new provider and take advantage of a cheaper plan.

Repeat this thought process for each of your monthly expenses. Before you know it, you may be saving hundreds or even thousands of dollars per month just by paying attention.

Reward Yourself

By going through this process of creating small wins, you will need to find a way to track your amazing progress. Without taking the time to track your progress, you may not feel you are making the progress that you actually are!

We all remember using a big red thermometer to track fundraising goals at school, or using sticker stars to show how many books we have read. Use these same (or similar) systems to track the progress you are making towards your financial goals.

Instead of making “$1,000,000” your retirement goal, start focusing on your contribution percentage instead. If you’ve done your homework and know that you need to get your contribution percentage up to 20%, make this your goal.

Start telling yourself - “if I can just find a way to increase my contributions by 1% every 3 months, I will quickly get to 20%, which will then take me to my final goal of $1,000,000.”

Give yourself a star every time you increase your retirement contribution by 1%, and let time take care of the rest.

Compounding Benefits

When creating small wins, you will eventually realize that you are gaining momentum. The feeling you get when you accomplish a goal will only motivate you on to the next goal. Step by step, you will end up reaching your final goals quicker than you ever imagined when you started out.

No one is going to force you to start, you have to be the one. By taking that first step today, you will be amazed to see the progress you have made when looking back 10 years from now.


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