“I think I’m ready to start my Masters next year.”
I looked up from the email I was sending, “oh yeah? Well, let me take a look.”
I sent the email off and opened up my excel spreadsheet, then whistled.
“What?” Ashlea asked, coming around the table and looking over my shoulder, “we have that much saved?”
“Yep. A bit over sixteen grand if exchange rates continue. Where are you going to go?”
Getting started with small wins
In the end, Ashlea decided to delay her Masters program another year (which means we get to save even more), but this conversation is a perfect example of the power of small money wins, and how they can affect both your personal life and your business.
About four years ago, Ashlea mentioned that she eventually wanted to take her Masters in Education, a program that will end up costing a not-small amount of money: between $20,000 and $50,000 depending on where she goes and if she takes time off work to complete it.
We decided to start saving for Ashlea’s Masters Degree immediately. We didn’t have a ton of expendable cash in my business or our personal life to start the savings process, so we harnessed the power of small money wins to make it work (though we didn’t call it that back then).
I started moving 5% of my monthly business income into a “Masters Saving Account”. Every time I received payment from a client, or a subscription payment for my membership, 5% of that money went to the account.
At first this looked a bit ridiculous. 5% of some of these payments meant I transferred $1.75 into Ashlea’s Masters account. Even when I received payments from larger retainer clients the money transfer would “only” be $175.
When working towards a goal between $20,000 and $50,000 those deposits felt a bit silly, and sometimes we would skip them and use the money for something else. We didn’t believe in the power of small money wins….yet.
Sticking with small money wins
Those deposits weren’t silly, and we stuck with it. When that account broke the thousand-dollar mark something shifted in our brains: we realized that each small deposit was accumulating and making a difference. We haven’t missed a transfer into the Masters account since.
Saving money in that account became a big reward that we started to crave. We started moving extra money we had into the account including Ashlea’s tax refund one year, and all the extra money we had at the end of each month last fall.
Now, as the savings grow, we continue the habit of putting 5% of my business income into that account every month, and we get closer and closer to paying for Ashlea’s Masters Degree with cash (which is super exciting).
Watching the small amounts of money growing in that savings account allowed us to push through our block that “your Masters is going to be so expensive, we will just use loans or our line of credit to cover it” and create a belief that “we can pay for your masters with cash”.
This is the power of small money wins.
Changing your money beliefs using small wins
- “My line of credit interest is only 9.99% not 19.99% like my credit card, I can take time paying it off”
- “Why save when I can use a credit card and just pay it off later?”
- “I will start making more than minimum payments when I get a better job.”
- “We make $120,000 a year. We don’t need a budget”
- “If I spread the payments over five years I can totally afford this car”
- “That video game ONLY costs $50, I can afford it”
- “$25 a month is pointless. I will save for retirement later”
- “It’s my education, I will just get more student loans. They are good debt”
I could continue. This list could get really long. It has only been 9 years (out of 43) that I have started to be more conscious and realistic with my money, and work through some of these beliefs.
My point is: you and I, we have a lot of junk built up when it comes to dealing with our money. And a lot of this junk is “killing” us because we aren’t using small money wins.
Death by a thousand (paper) cuts
The truth is, over all my years of struggling with money, I was doing the OPPOSITE of using small wins.
I was allowing my money beliefs to slowly send me further and further into bad money situations:
- Yes, the video game was only $50, but even though it may seem like a small amount while in the store, that $50 could have made a big difference in other areas.
- “$25 is pointless…” this one hurts the most. It was in response to a financial planner that wanted to get me started on retirement when I was 22. I don’t even like to think about how much money that would be now.
- Student loans are good debt. Maybe, but that belief lead to me accumulating student loans over and over again, without a plan or an upper limit or how I would pay them off.
In isolation, many of the money choices you are making right now may not be a big deal, but when you start to add up your daily Starbuck’s latte…
You are killing your finances with a continuous series of “small losses” instead of building your finances with a series of small wins.
Why small wins are so powerful
Let’s look at Ashlea’s and my original belief about her Masters Degree to explore the power of small wins:
“Saving $20,000 to $50,000 is too much to save. We will just get loans or use our line of credit to cover your masters degree and pay it off after”
So we tried a different belief:
“Saving 5% of my business income every month towards your Masters Degree”
This idea seemed much more doable. It didn’t focus on the huge, mountainous belief we started with, instead it gave us a small action that we could at least give a try.
This is where the power of small money wins comes from: small money wins test your beliefs, they are like tiny (safer) experiments that reveal new possibilities and resources, show you the ability to change, and help you identify barriers that you can then overcome.
You identify an action that you can take to create a small money win, and then you use that small success as a mental trigger to continue with the action and build larger and larger wins.
As these small money wins accumulate, they start to spill out into other areas of your business and personal finances and create even more change.
One small win leads to the next small win, which challenges and eventually overcomes your money belief, which then starts to spread, you begin new actions creating new small wins, and other areas of your financial life start to change and improve.
Small wins spreading
After that first $1000 built up in Ashlea’s Masters account, our attitude towards saving also started to change. We have used small money wins to save money to:
- buy new mountain bikes
- go to Nicaragua for two weeks using cash
- make extra payments on our mortgage and pay it off faster
- get out of debt both in our personal life and my business
- purchase software, coaching, and design work in my business
- supplement lost business income while pivoting into something new
The more you incorporate small money wins into your finances, and watch those small wins build up in our bank accounts, the more actions you will take to create new small money wins, and then, all of those small wins will start to expand into other areas of your life.
Take action with small money wins in your business
To use a Choice Account to create small money wins in your business you need to:
- Take 10% of every payment you receive from your clients and put it in a bank account.
- Wait for 30 days (or longer) before you review the money in that account, then make a decision on how you will spend that money.
(You can learn everything you need to about the Choice Account by signing up for my free class, “How to Start a Monthly Money Habit” here)
A 10% Small Money Win every month makes a difference
Holding on to 10% of your business income every month until you can take the time to make decisions with that money is a perfect example of how small money wins make a difference.
Holding onto that 10%, even for just a few days, shows you that you can successfully control your money, something that may seem impossible when trying to deal with all of the money and expenses in your business month after month.
Taking 10% of your income and holding it every month, even if you end up spending it on regular expenses, is a small victory with your money that YOU control. Holding on to that 10% every single month, then making decisions with that money counts as a small win.
Your Choice Account small money win pathway might look something like this:
- Save 10% of your income in month one
- Money is short that month so the 10% goes towards paying for your internet and cell phone
- You save 10% again in month two
- In month two you use all but $10 of the 10% for expenses. Now you have $10 still in your Choice Account
- In month three, again, you save the 10% (plus the extra $10).
- This month you use half the money for expenses, go out for dinner with your spouse, and still have $150 left over.
Now the money in your Choice Account is helping to support your business, your personal life, and starting to accumulate more and more.
As the Choice Account becomes a habit it leads to making more effective decisions with your money: paying yourself, budgeting, controlling spending, and making future money plans.
Eventually (faster than you may think), the power of the small money win builds upon itself and starts to change not only your beliefs around money, but how you operate other areas of your business. Small money wins lead to you making different decisions about marketing, sales, products, and new directions for your business.
This is one of the keys to changing your current beliefs around money in your business: start breaking down these beliefs, sometimes long standing beliefs that seem impossible to overcome, by starting with one small 10% money win that you experience success with every month.