Prospering is a Million Small Choices

Every day, you make thousands of decisions. Some have short-term effects while others make a long-term impact. When it comes to your finances, think of these decisions more like building blocks. As you stack the blocks, you’ll see just how important each piece is to the entire structure.

Prospering in your life and finances takes a million small money decisions that end up making a larger impact in the end.

Even if you save $1 to $3 a day by skipping the soda or afternoon snack, it may not seem like much, but you’ll quickly see this accumulate. Isolated events don’t seem to make a large impact until they’re stacked together with other small financial choices.

There are two questions to think about as you decide on where to spend your money:

1. Do I need this today?

Many times, there are purchases that you haven’t planned for, but you still need. There are car issues and home repairs and unexpected appliance failures. There are some financial hurdles you can’t ignore and must face today, rather than later. Some purchases you may see as a really good deal or know it would be used someday. But the question is not, “Will I need it someday?” The question is, “Do I need this today?”

The someday need may never come, or it could come tomorrow, but why gamble with your finances like that? More than likely, the item you think you may need one day, will never come. But if it does, you are not saving much by purchasing and storing it for years.

Decide if you could use the item today and if it is really necessary. Don’t let a discount or other sales tactics derail you from your financial goals.

2. Can I sacrifice this smaller purchase to save for a larger purchase in the future?

Many live by what is in their bank account. If they have the money, they decide it’s OK to buy. Though this makes sense and isn’t wrong, there is a better way to look at it in order to save. Instead, see if this fits into your budget so you can maintain your healthy bank account.

If you don’t need the item, but it does fit into your budget, the next thing to consider is whether you can sacrifice this purchase for one down the road. Will setting this money aside help you reach a financial goal a little sooner? When asking this, consider your priorities. You may find the item you’re wanting in the short term outweighs the future purchase. That is an OK decision to make. The key is learning to not make that decision on every purchase and neglect the financial goals you’ve set up.

Let’s brainstorm some of the small decisions you can make daily to set yourself up to prosper.

Before making a purchase, consult your budget first.
Grocery shop only when you know what you need and the amount you can spend. Then you will know what extra items you can purchase or what coupons/discounts you need to search for.
Make your savings account your top priority, for both emergencies and larger purchases in the future.
Challenge yourself to not spend any money at least one day a week. Make your lunch, clear out your freezer for dinner, and play board games as a family.
On at least one grocery visit a month, use coupons. Ask your local paper which day the most coupon inserts will be available. Then explore digital and printable coupons. Create your list to make the most of this shopping trip.
Try to beat your electric bill from the previous year without sacrificing too much of your comfort. For example, turn your heat one notch lower than normal and remember to turn all the lights off, except for the lights you need right that moment. If you succeed in spending less, save the difference in your savings account.
Bring your own coffee from home to work every day and take advantage of any free coffee at work.
Cut back on gift giving. No, you don’t have to stop giving gifts, but if you normally set yourself a $25 allowance for each person, try lowering it to $20 instead. This way, you can save $5 per gift.
Call and ask for a lower rate from your car insurance or your phone/internet company. It doesn’t cost except for a few minutes of your time, and it could end up saving you monthly.
Skip the extras when you go out. Skip the concessions at the movies or skip the appetizer and drinks at the restaurant.

Saving money isn’t about spending $0. It is about spending money efficiently and effectively. Your savings efforts allow you to do what is really important to you, while not feeling a strain on your financial situation.

You can prosper in both the spending and the saving. The key is doing both wisely and with purpose. Have you ever defined money goals for yourself? Now would be a great time to get started!