Over the years I’ve found myself, both here and in my real life, telling people with financial problems that small changes will help. I’ve told people that, “If you just stop eating out,” or “Stop spending on magazines at the grocery store,” or “Save $10 per pay period,” you can really help your financial situation. Other financial gurus pitch the same thing. I used to think this was good advice. After all, any amount of money you can save is a help, right? Recently I’ve given this some thought and I’ve about decided to change my tune. I’m not sure that little changes really help all that much for most people.
The reason for my about face is that lately I’ve seen a lot of people who make one little change and then expect everything to get better. It’s like making one small change is supposed to yield magical results.
“Well, I stopped eating out. Why am I still living paycheck to paycheck?” is one real-life example I’ve heard. Another was the person who came to me and said, “I don’t get it. I’m saving $20 per week in coupons at the store, but I still have thousands of student loan debt.” All the books and websites tell these people to just make small changes and the tone is often to the tune of, “And if you do, all your problems will be cured.” It’s no wonder people get confused.
We in financial circles tell people all the time to make small changes because it’s motivational. When faced with a financial mess, it’s overwhelming to think about dealing with the whole thing. So we tell people to just make a small change. Have that $10 automatically deducted from your paycheck and put into savings. The idea is that the person will be motivated by the success of that one small thing that they will try another and another until they’ve managed to get their situation under control.
Unfortunately, I don’t think some people are getting this message. Instead they’re getting the message that changing one small thing will magically solve everything. How can you blame them? Everything in our culture is geared toward the quick fix; the “now” mentality. From fast food to speed dating everything is about solving your problems in ten minutes or less. So when a book tells you to cut down on your lattes, it’s easy to think that this is the cure to your financial problems.
But finances don’t work that way. Sure, you can improve things with ten minutes of coupon clipping or five minutes of flicking off electricity. After all, if you’re in the middle of financial Armageddon some action is better than none. However, you cannot solve a big financial problem on little steps alone. At some point you’re going to have to wade into the big stuff like paying off thousands in debt, figuring out why you overspend in the first place, getting another income, dealing with legal issues, or selling things you love to pay the bills. There’s no easy fix for a big financial mess.
The real truth is that it’s hard, it’s ugly, it’s no fun and it often takes years to clean up finances that have gone seriously awry. But that’s not easy to hear. It’s easier to hear that little changes will cure your problems. Granted, little things will help and often little changes lead to bigger ones, particularly in people who are motivated. But please don’t get confused and think that if you just stop buying lunch at McDonald’s every day that all of your financial issues will resolve themselves. You have to deal with the big stuff if you want to have healthy finances. There’s no other way around it. The little things might set you on the right path, but they are not the whole path.