by a.b.

It’s difficult to see the value in cutting back your daily Starbucks at $3 a pop, when you’re facing thousands of dollars in debt. The key is in perception.

Three dollars a day is equal to $1095. That feels like it would put a dent in your goals. Even if you dropped your daily trip to every other day, or traded your tall mocha for a Pike’s Place coffee, you can still make a huge monetary change.

Some bloggers put things in an hourly context, i.e. if I’m saving $10 by making my own fabric softener, and it only took me twenty minutes, that’s like making $30 an hour. Wrong! It’s like saving $10 over the course of many weeks. Depending on how much laundry you do, it might save you $100 a year, plus you know what goes on your families skin (which would probably be the real bonus.)

You can even package your changes together to see the big picture. If you’re saving $600 a year in coffee, $100 a year in fabric softener, and $360 a year by cutting out cable TV, you’ve saved $1000 towards your financial goals.

How do you keep your savings from whisking away into lifestyle inflation or that random craving for a Happy Meal? I recommend paying yourself the money.

Each time you walk by the coffee shop, take the money out of your wallet that you would’ve spent, and put it into a special envelope. Each time you would’ve bought fabric softener, put the money you saved by making your own into that same envelope. Instead of having automatic billpay for your cable bill, change it to automatic deposit into your savings account, or have it automatically pay towards debt. (More on this in “Automate Your New Lifestyle.”)

At the end of the week, month, or even year, that adds up to a considerable sum towards your goals. I’ll illustrate it with my stepdad’s change jars. Everytime he goes out, he tosses his change into a jar. He always says, “It’s just change.” To make a point, I rolled it all for him to be deposited, and made him guess how much was in his jar.

“Maybe $15.”
“Are you sure?”
“Yeah, it’s just change.”
“There was $70 in your change jar.”

There really are no small steps or large steps; there’s only positive momentum.

So at this point, you’ve made a lifestyle change, and capitalized on momentum to make some really big changes while you still had the stomach and the heart for it. After you did, you took a step back and evaluated how this is working for you. Today, you’re learning the value of taking small steps forward to continue on a frugal path.

See also:
Simple Steps to Frugality: Step 1: Meeting of the Mind(s)
Simple Steps to Frugality: Step 2: Know Where You’ve Been
Simple Steps to Frugality: Step 3: Go For Big Gains Early
Simple Steps to Frugality: Step 4: No Extremes Necessary
Frugal Bang For Your Buck: Easy Ways To Cut Expenses