I’ve caught myself offering the same advice lately, anytime someone asks me whether they should pay off their debts or start saving for an emergency fund, or start investing, or start saving for an emergency while they’re paying off debt and investing all at the same time.
And that’s simply been:
“Just start putting $20/mo towards them!”
Nothing too crazy or earth shattering, but definitely a far cry from my old “all or nothing” approach I’ve been accustomed to doing over the years… You know, like when you can’t just have *one* beer because it’s either PARTY TIME!! or No Time at all? ;) Who likes boring middle grounds, right?
But after recent tests of just doing something on my long-awaited goals vs doing nothing, I’m coming to realize that there’s beauty in hitting multiple areas at the same time as well.
And three of these beauties I’m finding out are as follows:
#1. Doing something makes your heart feel good!
It doesn’t matter if it’s $20 or $2,000 – just the act of applying it to your goal completely changes your mood. Because now you’re finally making moves towards your goals vs just letting them fester in your mind! It’s like finally letting the world know you mean business, despite it not being at the tippy top of your priorities. Because one day it WILL be, and by that time you’ll already have some nice momentum going.
#2. Doing something makes your net worth feel good.
On top of all the warm and fuzzies, applying an extra amount to your goals – no matter how small – of course strengthens your overall net worth as well. Especially if you’re hitting multiple areas now. And even if you choose to divvy up the same amount of money across the goals vs just one big hit towards the #1, I’d posit you’d still come away higher in the end financially as you push yourself to strive even further. It’s amazing what a few baby steps can do, and this is especially the case for stretching our money!
#3. Doing something motivates you.
This might be the most impactful of all the reasons – simply because once you get on track and start dabbling in multiple areas of your finances, you tend to start hustling and learning harder and harder too! Because now you’ve got multiple races going on and can sense the real momentum starting to take place. It’s like taking an extra shot of caffeine along with your coffee every morning. It was already great as-is, but now it’s downright FANTASTIC! ;)
Again, all this comes from my own tests over the past few months as I expanded my horizon more and decided to stop waiting until The Perfect Time to start working towards my forgotten goals. Namely in the “giving back to charity” route, and more recently in the “contributing again to my kids’ 529 college savings accounts after being m.i.a. for a couple of solid years” route, haha…
Which looks like this:
- I’ve started giving $20/mo to my favorite non-profit organizations! (Including my own!)
- I’ve started contributing $50/mo towards each of my two kids’ 529s!
And I honestly can’t express just how POWERFUL these two actions have made in my overall mood lately. Even if that was the only thing that changed for me I’d recommend it.
Because now instead of cringing every damn time I think of either, a warm wave of happiness washes over me and reminds me that I’m starting to make some progress! Even if it’s not my perfect world of being able to contribute what I really want to be contributing to them both. I’ve already given out $360 now to my favorite organizations, and a cool $200 to the boys’ college accounts! All of which is better than $0.00!!!
So all this to say that while going “all in” on one focused area is quite fine, and I still very much do that in my preferred area every year (my one main goal is to max out my retirement accounts no matter what!), there’s something to be said for shoveling *something* over to other areas as well to get the balls rolling. You don’t necessarily have to wait until it becomes your #1 priority in order to start working on them – you can start RIGHT NOW with only $20.00 a month!
And that’s my challenge to all of you this week who are fed up with feeling bad about yourself for not working towards all your financial goals.
Pick the one or two sections that are really depressing you right now (or better yet – pick the ones that *excite you* the most so you don’t get burned out!), and then log onto your bank right away and set up automatic transfers of $20/mo each towards them. Start feeling good about it RIGHT NOW vs waiting months or years, or even decades, into the future! There’s never a perfect time, and you know this!
Worst case you just re-direct all future money back to the #1 priority and feel good for having tried something new. It’s the least you can do for your dreams :)
Just $20/mo, friends… do it!
That photo up top is a bill I found at the bank the other year… Remember how much prettier our currency used to be??? If you like this type of stuff, follow me over at my other blog too: CoinThrill.com!
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Good stuff J$
I’ve always said that happiness is found in the middle ground. You could be an extreme saver and unroll that double ply toilet paper and eat rice and beans for every meal.
Or, you could be a complete spend-a-saurus, dependent on a very high paying job to fund your extremely luxurious lifestyle.
Both of those are options, but in my mind the most happiness can be found somewhere in the middle of those extremes.
I love this and can vouch for the fabulousness of it. Every little bit…brings a big old smile to the face.
Haha okay – i have to ask: What does nine and a half fingers mean?? :)
Finding balance is a struggle! So, I couldn’t agree with you more. BWB Baby is only 5 months old and we have been setting aside $20 /week for her 529 Plan before she was born. It does feel good.
Slow and steady wins the race (oftentimes).
$20/week – even better than monthly! Hope you’re starting to get some sleep over there – it DOES get better!! :)
Getting started is the most difficult part. Once you’ve done that it gets so much easier to play around with your scenarios and change things up.
We are ALWAYS struggling with whether we should put all our money into our investments or how we should split it. It’s something we go back and forth about all the time. I really like this idea. I agree that even though it’s not alot of money, it would make you feel like you’re at least getting somewhere on those goals, versus being stagnant in all but one area of your finances. Switching the mindset from one path to split paths is the part that is difficult to do. Especially with a husband who loves to invest! Thanks for this idea!
Yup, totally get it – believe me! Try it out for a month or two and see how it goes :) You can always change your mind later and go back to “all in.” That’s the beauty with finance – nothing’s ever permanent!
Isn’t amazing how all those $20s actually add up to something substantial?!? I have tried this tactic (throwing little bits of money with consistency) towards goals and it takes awhile, but I always am amazed when I start finding traction and seeing the balances build.
I like the idea of giving $20 every month to a favorite charity. I usually give to charities around the holidays but I like idea of spreading around the rest of the year too. $20 to someone in need provides more joy than buying something I don’t really need.
Great post. You’re right – $20 or other small amounts do feel good and enable you to take action vs. doing nothing at all.
When you mentioned your all or nothing approach though, I’m still a bigger fan of that approach. But I think it’s the ability to switch between tasks or goals at times with greater focus and energy is where you’re going to make significant progress. The $20 is good to keep going on other goals, but it feels even better if you’re able to chip away at something else at the same time.
It’s finding and adjusting the balance as you go. Slow and steady does win the race, but you need to know when you need to give it a sprint or push for certain bursts.
Thanks again for the post.
Yeah – if you only had $100, let’s say, then spreading it to 5 areas @ $20/mo each prob wouldn’t feel as good as, say, $60 towards one and $20 to two others. So I agree the more powerful approach is picking one to amplify the most, while hitting one or two others on the side just to make you feel better than doing nothing at all.
This is really great advice. We also put $50 per month towards the kids’ education. It feels like so little, but know we’re going to be ramping that up next year, and in the meantime, I get that “warm wash of happiness” that you mentioned. Doing something definitely feels better than doing nothing. I think we’re hardwired to like the feel of progress, no matter how small.
Totally agree! I also put $20/month to charities including yours :) and a couple months ago started throwing $20/month into a couple different after-tax investment accounts. I don’t miss the money in our checking account and I know it’s doing something good for others and our future selves.
And I am SO THANKFUL you contribute to ours too! THANK YOU!!! :)
I pick charities to give to throughout the year. I pick ones that have meaning to me, and or I’ve checked out, or to support friends doing runs/ bike races. This let’s me turn down random other opportunities I’m not interested in because I have already made these decisions. Plus (as you mentioned), it feels good.
Yup! Much more gratifying giving to those you’re directly connected to more – even if just from the people involved – than a random or large organization out there just to “give back.”
I love the advice! We always think about a big chunk of money when it comes to investing or saving. But if you have $100, you can def divide it into smaller chunks and put them towards different purposes.
I didn’t know you have a non-profit of your own too. Getting wealthy doesn’t always just mean amassing wealth :)
“Do something” is one of our favorite principles! There isn’t ever a perfect time to start – you just have to do something to get started :).
Our monthly giving account was just about tapped when Harvey hit. So we gave what we had left to a diaper bank and a local animal shelter. We’ll give again when our budget resets this week (or earlier…because it’s my favorite excuse to blow my budget!). I wish more people encouraged these actions. Thanks for taking the lead, J!
One of the only times “blowing your budget” is good :) We need more people like you out here in the world!
I am horrible at “balancing” things as I am an all or nothing person as well, so I have been working on that myself. Most people probably do not have not enough money currently to do “all”, so if you don’t start you will probably never get there! So being able to do a little at least gets you thinking in the direction of doing something!
That is a pretty bill!! I’m too young to remember the $20 but how has it gotten so ugly compare to that?! It looks so classy there.
Wealthy doesn’t mean wealth, it’ll be the best $20 you’ll ever have if you spend it right!!
I have always taken a similar approach. There is nothing wrong with working on saving for a few different goals while paying down some debt. It is both fun and rewarding to see progress being made on multiple fronts. I am sure there is math that refutes this approach, but you have to do what works for you and what makes you happy.
Yeah, hard to go strictly with the math unless it fits your personality. Most of us get super emotional with all this stuff, so better to harness it to keep us going vs burning out just because we’re following “the right way” to do things. It’s only the right way if it works for us!
Motivation is a big factor for any goal, let alone a financial goal. Sometimes the most “efficient” path isn’t the right way if it provides no motivation. If someone is concerned with a few different financial priorities then alleviating that concern is worth more than $1/month in extra interest or foregone investment returns.
Anything is better than nothing! Sometimes it just takes a start. And when that $20 deposit starts looking like a $100 investment the motivation comes a lot easier. Not to mention we easily adjust to not having that extra $20 there. Automatic investments are my favorite because you can just sit back and watch the results pile up :)
Good advice and similar to the saying that there is no better time to start than now. Might as well start all of them with $20!
Just start and iterate!
Trying to come up with huge sums of cash or chasing a huge number can kill the motivation. Along with trying to do too much right away and burning out too quickly.
The littlest baby steps make all the difference! When I was just starting out after college, I could only afford to put $5/week into my savings account. I had to really stretch just to make that happen. But boy, was I happy I did it! I had to dip into my $600 savings to pay rent and buy groceries when I transitioned to a higher-paying job. It helped me avoid credit card debt!
$5 – love it! It all helps in the motivation game :)
This trick probably works for someone new to personal finance. I doubt I’d feel anything if I contribute $20 to the mortgage. It makes no difference.
$20 to charity is good, though.
I love this advice for money! And I think it extends beyond that. I’ve found that I am doing this sort of “baby contribution” on my time as well now. In the past if I couldn’t finish something in one sitting, I would just put it off. This meant down time where I’d browse Facebook, watch TV, or do something else equally unproductive.
But now I’ve started to take all the few little minutes I can get and use them more productively. A good example is dishes. Maybe I don’t have time to empty the entire dishwasher right now, but I can take care of the bottom rack while my wife finishes getting ready in the morning, before we head out for work. That shaves off 2 minutes in the afternoon that I don’t need.
It’s small, but the little changes have added up to me being able to do considerably more stuff with my time, which is awesome.
This is good advice for sure :)
YES!!!! GOOD POINT!!! I think many of us do the same thing – especially with exercising too :) I’ve caught myself just doing like 10 pushups in between tasks just cuz you can do it right away without carving up extra time for getting dressed or showering/etc. Sometimes I’ll literally just go outside and start running for 10 mins too as soon as the idea crosses my mind before I explain my way out of it hah… (although usually after that i do need to hop in the shower :))
I so agree. Just start! Anything is a positive and you can adapt over time. But waiting for the perfect determination of a starting point will just mean you never get anywhere.
I think a mixture of payments is a good call too. I debate often- should I save in a taxable account, pay off my low interest school debt, or pay off my low interest mortgage. Math would favor a taxable account, but when I pay a little into each I feel much much better….kudos on the 529 plans….who knows what school will cost in 15 years.
Started doing you save $1000 in a year, so I’m putting money away each week. Some weeks are harder than others, but so far I’m 18 weeks in.
I also just started taking a class to improve my job prospects and just starting has gotten me really motivated. Thanks for all the good advice.
Congrats!! Keep on going!!
Ahh! The struggle is so real, and I’m glad I’m not the only one. A little bit here and there will make a bigger impact later on than any of us realize!
I think none of us are immune to problems in life, no matter our finances :)
I definitely think that the best day to start doing anything is today rather than tomorrow. One of my motivating factors to save money is to either get free money of tax benefits when I save. By getting free money when I save, I am either getting faster compounding or getting the same amount and paying less.
Very solid advice. Something is always better than nothing! Many folks can feel so overwhelmed that they do not know where to start. The result is a financial paralysis. Following your tip will be one of the best ways to turn the ship around and build some momentum.
I’m a big fan of this when you don’t have the freedom to make the big moves.
We are in a real cash crunch right now and will be for a little while longer but with the crisis in Houston thanks to Harvey not moving his butt along, I’m doing my own version of this. I listed several organizations doing great work on my post today, and I’m going to give a little bit to each charity each day that I can wiggle some money loose because it may not be much from one person, but a little from each person is going to add up and make a difference.
YES! And you are a beautiful person for doing so too!
Reminds me of the starfish story :)
Exactly the starfish story! I hope everyone feels the call to help someone even if it’s just a little bit, today.
Also thanks to your reminder, I remembered to start up JuggerBaby’s automated 529 contributions again, thanks! :)
So glad to hear it :)
I couldn’t have said it better! $20 is all it takes.
I had this same mentality back when my kids were born and I wanted to start putting money inside their 529’s. We started with $50 per month each, then bumped up to $100 per month. Now they each have five figures waiting for them freshmen year!
Nice man! Lucky kids to have parents like you :)
I can relate to the feeling of joy and accomplisgment. Just last Friday I was able to put $100 into my Roth IRA. Not much but I did not plan it until September. Because I managed to stick to spending only what we planned on spending I had the ‘extra’ to put away. I was very proud of that :)
Yayyyy good job!!
Wow – I was just thinking about this yesterday. I was thinking of making a small-ish contribution to my older kids 529 but was on the fence because it wasn’t big enough to make a dent. (I think the start of school and going to the next grade makes me conscious of the looming college costs). I guess every little bit helps – thanks J$!
Yes to starting small! Every little bit counts and you really do feel motivated after a while because you see the plan is working. Before we started saving, I actually used to think a small amount of money is insignificant and not worth it. I kinda regret not starting earlier on.
Yup, starting small works just fine. I tend lean toward all or nothing, but over the years I’ve learned from my spouse that steady wins the race when it comes to finance.
Your post was a good reminder for me, just at the right time too – thanks:)
Great to hear it, Rose!
A couple of weeks ago, my wallet was stolen. I had two credit cards, my license and probably $60-$80. It was at the library… which I was surprised, but it is what it is. I left the library and started walking home and about 10 minutes into my walk, I had a strange feeling, so I took my backpack off to check for my wallet and it wasn’t there. I first had that sinking feeling. But, since I still had to walk 10 minutes before looking for it, I had time to think. It really wasn’t that big a deal in the big picture of life. My license was expiring in a month anyway and I only had to cancel two cards. The loss of cash sucks, but isn’t really that big a deal. So, what I decided to do was use this experience as a challenge and satisfy my minimalist cravings. :)
I have since gotten my new cards, but they stay at home. When I renew my DL, that too will stay at home. Like you said, $20 makes a difference. So, my challenge is that I’m only going to walk around with $20 (or less) on me and no credit cards or ID. I’ve already noticed that my frivolous purchases have gone waaaaay down and I now focus on the necessities. It really makes you think. Plus, I used to put everything on a credit card for the points, so I generally know my previous monthly spending habits by looking at past statements. I’m going to start tracking my reduction in spending and put that amount into a separate account every month that I will use in the future for giving away/donating, and I will use your recommendation of the $20 increments. It is a win-win, because it is a fun mental challenge, and then I can have fun giving away money. :)
Also, I need to do a shout out to RCF… not only was it awesome that I could help my friend in need with the $150 debt drop, but it was so much more fun to give to a community where it feels personal. I still donate to large organizations where I believe in their mission, but it is not nearly as much fun to get a cookie cutter thank you letter as it is donating to the RCF and getting a personal email from J$ himself! :)
“I’m only going to walk around with $20 (or less) on me and no credit cards or ID”
oh wowwww that’s a huge one! it would make me too nervous going around w/out the ID just in case of random emergency situations, but i hear you on the no credit cards and limited cash route. I know for a fact that would help me spend less too! the other day i forgot my cell phone for a good 6 hours and that also felt nice and freeing :)
RCF — awwwww, well i’m so glad you got a lot out of it as we did too :) we’ve been a bit more laid back on it lately just cuz of time and family commitments, but the RCF is still humming along and doing good so continue keeping us in mind for any other ideas or people you know who could use our help! we’re ready to do good at a moment’s notice!
“it would make me too nervous going around w/out the ID just in case of random emergency situations”
Yeah, this entered my mind as well, but I kind of brushed it off. But, you are right that if I get hit by a bus or something, I would like to be identified. :) So, I remembered that the last time I traveled internationally, I took a paper copy of my DL and passport in case I lost the real documents overseas. I still have that piece of paper, so I put it in my money holder so that I do have some way to be identified, but, if I lose it, there is nothing that is a hassle to replace. :)
And yes, I will let you know when I’m ready to hold another workshop. Like you, I’m trying to practice some essentialism at the moment and I have some very narrow focuses at this time. :)
Well that’s a good idea! You should try it when you walk into a liquor store too – hah.
Very interesting! What I was thinking of is that even though I’m not much of a saver, I do invest about 20$ in promoting different posts or new pages to see which will catch on, probably weekely.
And I know what you mean about feeling fantastic doing it, I’ve been lending on kiva, 25$ here and there can help someone make a living, and they even repay you so you can lend the same amount multiple times.
Love Kiva! Been a while since I’ve had my money invested there, I should jump in again and keep re-lending my $20 :)
Consistency & smallness, that’s how you can reach your goals.
I did this when I was super intent on getting rid of my student loan debt. I put a bunch towards the student loans and $25/month towards my other savings like retirement. Now that I’m debt-free, I’m putting more in there now!
Our mantra in college was “done is better than good” because we could become paralyzed with perfectionism. I think you are onto something with the just throw $20 at it solution.
It works a lot with entrepreneurship too and just getting your idea out there into the real world :) We obsess soooo much about making things perfect, when half the time even doing it just 60 or 70% well would do the trick! and then tweaking from there!