I’ve mentioned this before, but when it comes to getting ahead financially there are two routes you can take: 1) increasing your income or 2) decreasing your expenses. There’s no denying the power of increased income, but that doesn’t mean small cut backs can’t make a difference.
Sometimes, starting small can be beneficial over time. Not to mention, when you dive right in and avoid “starting small”, you run the risk of burning out or failing. Neither of which are great when it comes to budgeting your money. I’m sharing 5 ways small cut backs yield great results, in case you are wondering what the point of cutting back is!
#1 Small cut backs lead to bigger cut backs
Before you can go big, you need to start small – especially with your budget. When you make too many cut backs at once, you run the risk of splurging. It’s a proven science! You deprive yourself for as long as possible, then end up spending a ton more than you would have if you made small budget cuts.
Until you can master budgeting in moderation, you won’t be able to get rid of the big-ticket spending areas. That’s just one of the reasons why start small with your cut backs can lead to bigger results over time. When you get to a point where small cut backs have minimal impact to your happiness, you can start focusing your efforts on bigger spending cuts.
#2 Small cut backs test your capability and will power
At one point in time, we’ve bought something we shouldn’t have. We knew it wasn’t good for our budget, or that it would put us in debt, but we purchased it anyways. I’m guilty of this too! While we can’t change our past spending decisions, we can leverage small cut backs as a test of our current will power when it comes to buying things we don’t need.
Here’s an example: if you buy coffee every weekday, a small cut back could be buying coffee every other day of the week instead. It’s much easier to convince yourself to skip a coffee purchase today if you know you will purchase one tomorrow.
Imagine if you had decided to quit buying coffee cold turkey. You went from getting coffee every day to nothing. There will likely be a time where your will power is tested and you may succumb to the coffee. Give yourself a chance to succeed by easing your way into the coffee cut back.
#3 Small cut backs truly do add up (when they’re consistent)
While the $1 savings here and there may not be much at all at the time, it certainly adds up. If you don’t believe me, check out 5 Unexpectedly Expensive Habits. In this article, the costs of certain daily habits are added up over the course of the year. When you look at the annual amount, as opposed to the daily amount, you see it in a completely different light!
You can also see the power of your small cut backs when you start tracking your spending. Before you make small budget cuts, analyze and write down what your spending is. Then, factor in your small cut backs and stick to it. Add up the savings over the course of a quarter and you will understand why small cut backs can be impactful.
#4 Small cut backs keep you motivated
There is a science behind goal setting and achieving those goals. A key factor is “baby steps” – basically starting with small changes until they become the norm. Small changes are much easier to stay consistent with than big changes. The same applies to cut backs in your budget.
Small cut backs are a lot easier to stay consistent with than heavy budget cuts. As you succeed at your small cut backs, you keep the motivation alive to fight on. Your small wins serve as inspiration to keep the wins going. You also realize that a small slip up can be remedied easier than an expensive slip up – therefore making it easier to get yourself back on track.
As you succeed at the small cut backs in your spending, you can see how capable you are. You can harness that capability to keep going and keep the motivation to stay in budget alive!
#5 Small cut backs turn into lifestyle changes
As you master small cut backs in your budget, they will get easier and easier. It will eventually get to the point where you don’t even have to think about it. At one point you would have splurged because you had zero will power, but now that small cut backs are the norm, you don’t think twice about buying something you don’t need. This alone makes small cut backs so powerful.
Those small, seemingly harmless cut backs lead to a complete lifestyle change. Once your lifestyle has changed, you open the door for greater things to come your way. You understand that the little things do add up, and you have enough will power to say no to the things that won’t help you in the long term. A mindset shift comes when small cut backs are leveraged consistently over time.
Related: Small Habits, Big Returns
Hopefully this article inspired you to think small, in addition to thinking big! Small changes can lead to great results, if they are consistent. Are there any small changes you have made to your budget that added up over time? How do you stay consistent and strong with any type of budget cut back? Share your thoughts, tips and experiences by posting in the comments section below!
The CGS Team