If you’ve had a hard time saving up for a dream vacation or new vehicle, you’re not alone. Sticking to a budget or saving for a major purchase is just plain hard for most people. Fortunately, our own brain chemistry plays a powerful motivational role when it’s time to take action. In order to achieve major money goals, learning how to harness your own brain chemistry’s power is key for success. In fact, a series of small wins is the quickest path to achieving major financial goals — no matter how large!
Why Small Wins Pave the Path for Achieving Major Financial Goals
Recent studies about the role neurotransmitters play in regulating human behavior shows that dopamine production drives our primary motivation to act. In other words, setting bite-sized budgeting targets and achieving small wins can trigger positive brain chemistry. Now, imagine those small wins as mile markers you’ll pass on your marathon run towards achieving your major financial goals. (It’s not a gimmick… it’s a scientifically proven behavioral method that works.)
Science Daily reported on a dopamine study conducted by researchers at the Universitat Jaume I of Castellón and published in neuroscience journal Neuron. They reviewed dominant dopamine theory, positing that neuroscientists previously had an incomplete picture of how the neurotransmitter actually impacts us.
“It was believed that dopamine regulated pleasure and reward and that we release it when we obtain something that satisfies us,” explains Mercè Correa. “But in fact, the latest scientific evidence shows that this neurotransmitter acts before that, it actually encourages us to act. In other words, dopamine is released in order to achieve something good.”
Armed with this powerful new knowledge, advisors now suggest setting bite-sized money goals that result in frequent, yet small wins. Achieving small wins spurs your brain to keep moving forward until you finally accomplish your major goals — including financial ones. This includes saving enough money for your new home’s down payment, building a diverse investment portfolio or planning your retirement.
Examples of Small Wins You Can Usually Reach In 30 Days or Less
According to a May 2017 consumer survey, Americans waste $140 per month on unnecessary purchases. In fact, 41% buy brewed coffee or tea out in a typical week. Here are some examples of small wins that can help get you started right away:
- Cancel unused monthly subscriptions. Be honest: How many magazines are you actually reading cover-to-cover? It’s easy to rationalize a recurring purchase that’s just $10-$20 per month, but several of them can add up fast. And that goes double for premium cable TV channels, which can set you back a whopping $100-$200 monthly. We recommend monitoring your viewing habits and writing down which channels you watch 3-5 times per week. Then, consider subscribing to the app instead and cutting the cord altogether. For example: HBO Now costs $15/month. Sling TV costs $45/month (Hulu Live is $40). Why pay for something you barely even notice — like those 500 cable channels you’ve never watched? If you need cable TV, call your provider and switch to a less-expensive plan or ask about bundled service discounts.
- Go to a dollar movie instead of first-run theaters. Budget movie theaters are popular for a reason, and if there’s a drive-in near you, even better. Simply waiting 1-2 months after a film’s initial release to see it in the theater provides the exact same experience. Depending on your location, you’ll pay $20 max for a date-night movie for two instead of $60-$80 on opening weekend.
- Cold-brew your own coffee concentrate or take a hot cup to go from home. The average American spends about $5 on fancy coffee and tea drinks when they’re on the go. Just counting Mondays through Fridays, that totals $1,200 annually or more you could save by brewing your own at home.
Examples of Small Wins You Can Accomplish Within Six Months to One Year
Here are some small wins that could save you big bucks within the next 6-12 months:
- Ask credit card companies to waive fees/lower your APR. If you’re a loyal customer who opened your account years ago, you probably have more leverage than you previously thought. Starting with your oldest account, call each credit card company and ask whether you qualify for a lower monthly APR. Talk to your bank about waiving your annual account and ATM transaction fees on your debit card. You might be surprised at what you can get just by asking, so why not give it a try?
- Pay down your debts in order from highest to lowest interest rate. Look at every loan payment you’re making each month and order them from highest to lowest APR. Then, order those debts from highest to lowest amount within the same APR range. (Hint: You should usually start with credit card debt, especially store or retail cards.) By eliminating that monthly payment first, you’ll make significant progress toward living a debt-free life. Think of how great you’ll feel as each monthly payment disappears!
- Skip your next smartphone upgrade and choose a lower-cost data plan. In many cases, your monthly phone bill drops significantly once you’ve paid for the device itself. Keeping an older model for one extra year saves you hundreds. Once you’re out of contract, you have more flexibility and can shop around for a better bargain. Plus, you’ll feel less rage if you drop your phone and break its screen once you’re paying less each month. If you’re out of contract now, MetroPCS currently offers a few different plans below $100/month that include unlimited data.
- Cancel your gym membership and find other ways to exercise. If you’re not bound to honor an annual contract, skipping the gym could save you big bucks a month. Some people won’t give up a favorite machine or exercise class, which is understandable. If this describes you, check your local YMCA and see if they offer similar amenities for less money. If you’re simply walking on a treadmill, why not meet a friend and hit up the park or mall together? You can also trade expensive gym equipment for a jump rope or free weights to use anytime on your own.
- Plan your meals each week to avoid eating out so often. Yes, takeout is delicious. But it’s also a major budget-buster, especially for single people living alone. Take some time each weekend to plan out your next week’s meals beforehand. Then, get the groceries you’ll actually need to cook each one at home. Not sure where to start? Buy five pounds of brown rice for less than $10 and cook four cups on Sunday afternoon to keep handy. Now you have a stir-fry base ready to go or a side dish already prepared for every night this week.
