Written by money contributor Charlie Park.
One of the funnier “religious wars” I’ve seen when it comes to money is fighting between people in favor of “big wins” versus the people in favor of “little wins.”
“Little wins”-ers want to be as frugal as possible, to look for ways to save money wherever they can. “Big wins”-ers see those little steps as a waste of time. Instead, they look for a few big areas where they can save money, and focus their energy there.
Which of these approaches is better? Which one will do a better job of getting your family on solid financial footing?
Are you a “big wins”-er or a “little wins”-er?
“Little wins”-ers clip coupons. Or turn off the lights when they leave the room so as to not waste electricity. They probably pack lunch instead of dining out at the office.
“Big wins”-ers do things like refinance their mortgage, or negotiate a lower rate on their car insurance, or work on getting a higher-paying salary.
So which one is more effective?
It’s actually kind of a trick question. The truth is, neither one is more important than the other. You’re best served by focusing on both the big things and the little things. The problem: We’re probably drawn to one or the other, and it’s easy to dismiss the one that makes you less comfortable.
Step out of your comfort zone
For example, I really don’t like haggling. Some people love it. But the idea of calling up my insurance company and asking them to lower my insurance premiums makes me really uncomfortable.
I don’t like confrontation, or rocking the boat, or being presumptuous. I don’t want to run the risk of insulting someone by trying to barter down. “They must have good reasons for asking that price,” I tell myself, “so I can either buy it at that price or walk away.” I’ve gotten very good at walking away. I’m a “little wins”-er by nature.
But my insurance company would prefer to keep me on at a lower rate than completely lose me as a customer. And the worst that can happen is that they say “no” … so it’s really something I need to work on. And when I step back and think about how I could save hundreds of dollars a year by making a few quick phone calls, I realize how badly I need to swallow my pride and get on the phone.
On the other hand, there are plenty of people who only go after things like getting a raise, and refinancing their home, and who totally ignore things like turning off the lights, or buying things used at yard sales, or drinking water instead of soda when dining out. Only doing “big things” is a problem, too.
By practicing frugal habits, by focusing on little wins, you remind yourself daily that a bit of sacrifice isn’t that bad. Would you like to buy that new pair of pants? Sure. Will you survive if you don’t? Absolutely. Will “going without” help you pay off your debt / build up your reserve / save for that more-important thing you’re waiting to buy? Almost certainly. The “little wins” that you can get are not meant to grind you down. They’re just small hurdles that you run into a lot and that — all together — really add up.
So you really should be looking at both the every-day ways to save money and the occasional big-ticket ways to save money. And, for most of us, this means stepping outside our comfort zone.
Focus on big wins for surprising — and long-lasting — consequences.
Photo by epSos.de
If you find yourself drawn to the “little wins,” see what you can do to challenge yourself and to push the boundaries of what you’re comfortable with. This can be something you and your spouse can do together. Think of it like a team-building exercise.
- Call your credit card and ask for a lower interest rate.
- Call three different car insurance companies, and then call your own and try to negotiate the rate down.
- Evaluate your monthly recurring costs (like your cable bill, phone bills, and internet bills) and see if you can “close, cut back, or consolidate” them to save money.
- Look at your salary history and ask your boss for a raise. (Sometimes setting a deadline on when you’ll ask can help!)
- Refinance your mortgage, simply.
If you’re uncomfortable with any of these, you can try “bribing” yourself: Look at the amount you’ll save each month (say it’s $50), and take the first month’s savings and spend 100% of it on something fun that you wouldn’t normally get for yourself. Every month after that is gravy.
Focus on little wins to create a rhythm and a focus in your family’s life.
Photo by cdrussorusso
If you normally see little wins as “not worth your time,” recognize that some of the value in them isn’t the money saved (though that does add up!).
Frugality blogs have millions of these, but they’re essentially like the ones I’ve mentioned in this article: turn the heat down and put on a sweater, turn off the lights when you aren’t in a room, pack lunch instead of dining out, use a clothesline instead of running your dryer, and try thrift stores first when you need new clothing.
Talk about both kinds of wins with your kids, to teach them more about how to be responsible about money.
Just like advice on “how to talk with your kids about sex,” you should talk about money early, often, and in an age-appropriate way. Talk with them about what money is for, where it comes from, and how to use it well. And show them both the big and little ways that you can save money on the things that don’t matter as much, so you have more money for the things that do.
Are you a “big wins”-er or a “little wins”-er by nature? What are some of your favorite ways to save money? And have you ever overcome some discomfort in order to save money?