How Small Financial Changes Make a HUGE Difference

Small financial changes, big financial differences 

Are small financial changes the key to big success? I think so and will prove it to you! 

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Small changes inspire small financial changes in me 

Such a little thing, but the difference it made was great. – Morrissey

I was speaking with my co-worker, Scott, about his duplex. We were discussing how to afford real estate, and he told me his process for choosing a property that isn’t currently in the best neighborhood but is up and coming.

He said, “A little research showed a particular area just outside where I wanted to buy and was selling for significantly less. Not only that but geographically, it was in the direct path of improvement. There was no other direction development could go except for this area.

I felt like I knew something that was evident to everyone, and couldn’t figure out why more people weren’t acting on it. Anyone that lives in Denver can see the development and the general direction of improvement, the light rail, the redevelopment of the highway, the “gentrification,” the demographic changes, etc.”

Small changes to his geographic search let him “house-hack” home purchasing. Scott lives in one room of one-half of his 2-bedroom duplex, and rents out the other half. He also rents the second bedroom in the half of his duplex where he lives. The rent from his friend combined with the rent from the other side of his duplex pays his mortgage and pays his living expenses.

Scott’s still close enough to downtown Denver that he doesn’t miss out on anything. But rather than only being able to afford a one- or two-bedroom condo, he doubled his space. That small change made a huge financial difference that didn’t make much difference to Scott’s quality of life.

Like the Debt Free Guys, I was keeping up with the Joneses 

The Debt Free Guys write about their experiences with money and debt. John and David felt a need to keep up with the Joneses during their 20’s – new clothes, cars, dinners and drinks out. Saving their money didn’t come into the equation until much later. I get it. I did similar things.

I used to be a waitress at a bar. A gambling boat opened on the other side of the county and some of my fellow servers and I decided to go out one night after work.

I remember sitting at the blackjack table, completely unaware of how the game worked. I took my cards and did my quick math. I asked for another card or not, depending on my insufficient knowledge, and busted more frequently than I won. It took less than forty minutes to lose every dime I spent the previous eight hours earning.

That’s where that tale of woe ended for me. I didn’t go to the cash machine and get more money to “win it back.” I did learn my lesson about gambling. I didn’t waste that money on the boat. I would have done something else stupid with it, I’m sure – bought clothes or shoes I didn’t need.

But what if I had made some small financial changes? What if I invested that money in the stock market? I still lived at home with my parents. What if I bought a house? I could have started house-hacking like my friend Scott.

Like the Debt Free Guys, small lessons inspired me to make small financial changes that led to big financial successes.

Small financial changes led me to real estate investing 

I did buy a condo a few years later. I graduated from college and was working at my first “real” job. A friend was going through a divorce, had rented an apartment and had to break the lease early. I took it over without consulting the landlord. Rent was $410 a month to live in this one-bedroom apartment. When the lease was up, I moved back to my parent’s house to save to buy a condo. I knew I didn’t want to keep throwing my money away on rent.

That small financial change, from renter to owner, made me a lot of money and opened the door for me to create multiple streams of income for myself. My mortgage payment was $417, so I was spending only an additional $7 a month. Then, I ended up selling that condo for 50% more than I paid for it. The amount of money I made selling that property motivated me to start investing in affordable real estate and diversify my income streams.

New year, new you but not new me 

I hate New Year’s Resolutions. The big ones always involve massive life changes, as though by the calendar flipping to January, we’ll magically transform into a non-smoking, healthy-eating, exercise-enjoying go-getter who’ll rule the world.

When you don’t succeed, your failure is magnified because it’s a new year. We should just be able to make the changes we need. Change is hard. A BIG change is harder. Small changes, including small financial changes, are easier and can lead to big financial success.

So as the calendar flips, look at your life. What small financial changes can you make?

Note: This article contains affiliate links. This means we’ll receive a small commission at no cost to you if you buy items through these links. We only recommend products that we use or have thoroughly vetted and would recommend to our moms.

Mindy Jensen is the Community Manager for BiggerPockets.com, the premier real estate social network. She writes about real estate and personal finance, and in her spare time, she’s a real estate agent and investor, flipping houses with her husband. Keep up with her on Twitter (@MindyatBP) or follow her on Facebook.

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One Comments

  • Adriana @MoneyJourney 12 / 04 / 2017 Reply

    I don’t believe in New Year resolutions either. I quit smoking in May a few years ago. I can’t even remember how many times I’ve said “this is my last cigarette ever!”, just to light one up again on the 1st of January.

    Other small financial changes that saved us money in the long run were switching providers whenever possible (lower bills saved us hundreds over the years) and learning the difference between wants and needs. Keeping up with the Joneses was never a problem for us, but of course, temptation to spend money on items you don’t really need is high when you live in a consumer society.

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