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Small Victories

November 8, 2011

Small victories can strengthen your finances

Coach Andy Long and the Lady Haymakers coming up with a plan

Before my job at Northeastern Junior College I was a social studies teacher and girls’ basketball coach in central Nebraska. My team lost the first six basketball games of my first season coaching. I had a feeling it was going to be a difficult season, but the team and I worked tirelessly to improve. I figured we could only go up from 0-6.

We worked on little things the first half of the season: Ball handling, passing and shooting. And, rather than developing new offensive and defensive schemes, we honed our current ones.

By focusing on the small things — the very basics of the game — we upset one of the top teams in the state in our class. We followed that by winning the next 15 consecutive games of the season, the most wins ever in girls’ basketball in the the school’s history. For us, the smaller victories led to larger ones.

The same is true in personal finance. If you have read some of my earlier columns, you may remember some of my family’s small victories. My wife and I increased our life insurance amounts. We had been underfunded, which I knew, but I drug my feet on it until recently. We know that our children will be taken care of financially if something happens to either or both of us. We put away money every month for Quincy and Brooks’ college as well.

We also have cut back in terms of spending. The largest was getting rid of cable and replacing it with Apple TV and Netflix. We did away with our cell phones and instead went with a land line phone and track cell phone where we simply pre-pay for minutes. These are not earth shattering savings by any means, but they hopefully will make a difference in our bottom line in the long run.

Maybe you are looking for a way to have some minor victories when it comes to your money. If you are struggling with debt, try the debt snowball. Line up all your debts from the smallest to the largest amount. Make the minimum payments on each, and with your extra money, concentrate on knocking out the smallest debt in its entirety. Once that has been paid off, move on to the next smallest debt.

This method does not necessarily make the most sense mathematically, as you may be paying off debts that have a lower interest rate while only making minimum payments on some with higher interests. However, since the way we save and spend our money is hugely psychological, the sense of victory you will experience from eliminating debts may give you the encouragement you need to wipe out all your debt.

If you want to cut your spending, list all your expenses for a couple months to see if there is anything you can eliminate. For the rest of your expenses, set up a budget and use cash to pay for everything. By taking out the right amount of cash at the start of the month, you will know exactly how much money you have left every time you pay for something.

If you are concerned you are not investing enough for retirement, try starting or increasing your Roth IRA by an extra $50 a month. This may not seem like a lot, but if you keep this up over many years, the compound interest you get can make that smaller monthly investment grow into the thousands.

You may be going through your own losing streak right now. If that is the case, take a minute to step back and assess your situation. Instead of going for trick plays and complex strategy, simplify what you are doing. Write down some small victories you can achieve this next month and keep your eyes on the prize. One small victory after another will eventually lead to big ones for you.

2 Comments leave one →
  1. November 29, 2011 11:43 pm

    Wow, in retrospect we turned out so much for only a couple of years!

    • November 30, 2011 8:53 pm

      I was doing a search for a picture and came across the article on-line about us beating Lexington. It was a fun season!

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