5 Small Ways to Improve Your Finances Today

We are told that if we shoot for the moon, we will at least end up in the stars. But when it comes to finances, one can easily get overwhelmed by lofty goals. On an entry level salary, it can seem impossible to try to save enough money for an emergency fund, let alone retirement.

So a better approach may be to make smaller goals. In 2016, Facebook founder Mark Zuckerberg wanted to be in better shape. He could have easily set a tremendous goal — like running a marathon, but instead he set a very modest goal — to run one mile a day. Despite not shooting for the moon, his work on consistent results led to him being able to run 20 miles by year’s end. Consider these five very small steps your “one mile a day” goals to finally improve your finances.


Increase your 401k Contributions by 10%

If you haven’t opened up your 401k yet, then this is a great time to do it. If you are not maxing out your 401k contributions, contributing even 1% more can be a good idea.

A one percent increase doesn’t seem like much at first but could mean a lot in the long run. For instance, let’s say you get a 1:1 match from your employer and you currently put in $2000. If you increase your contributions by $200 (10%), you get an extra $200 chipped in by your employer, plus you don’t have to pay income taxes on that amount. So basically you are turning your $156 in after tax income, or $16/month, into $400 invested in your future. That’s a great return by itself but becomes even sweeter if you consider the effects of time. Compounding annually, this extra $400 per year could lead to an extra $90,000 in 40 years. That’s quite a return.



Reduce your expenses by 1%

Increasing your investments is great for your finances, but so is saving money. If you spend, for example, $3,000 per month on average, try to reduce your spending by $30 each month. Eat one less dinner out. Negotiate a lower payment for your car insurance. Skip a few cab rides. Do a shopping ban for a month.

Over the year, you’ll save $360 from this change. It might not seem like much, but consider that 46% of Americans could not cover an unexpected $400 expense and this amount of money seems pretty solid. Further, some changes will carry on to future months, snowballing the effect (like decreasing your insurance rates). You also give yourself the confidence that if things go south, you have some strategies to make up the difference in your expenses because you will have already lowered some of your expenses via this trick.


Increase your debt payments by 1%

Some debt payments — like student loans or car payments — can wallop your budget with high interest rates. If you have a $30,000 student loan debt on a 10 year payment at 6% interest, your payments are likely $334/month. You will pay $9,926 in interest when all is said and done.

If you increase your payments by a mere $4/month to $338/month, you’ll pay off your debt two months earlier and save $172 in interest. And what are you really going to do with an extra $4/month anyway?



Aim to make 1% more income

If you can’t ask for a raise, side hustles are great ways to bring in extra income and stretch your creative mind. If you currently make $40,000, that’s $400 more for the year or $33 more per month.

You could sell some extra clothes on eBay or Poshmark. Try a gig on Fiverr. Creating these skills will give you confidence about taking care of yourself, and you might even be able to start something longer lasting. Click here for 15 creative ways to make extra money.


Give $5 more to charity

Clearly this challenge is different than the others because it’s spending money on others rather than saving or investing money. Many people wish they could give more to charity. Most people, though, think that it will have to be in the distant future when they have “enough” money so that they will have a surplus to give. If you wait for a perfect time, it’s no wonder that people never start giving.

I propose a small budget to get into the habit of giving. Consider this your “one mile a day” habit for giving — give just $5 away a month. Give a dollar to the barista that makes your coffee. Give a dollar to the homeless man on the street. Donate a dollar to your friend’s Kickstarter. Create a recurring donation to a charity of your choice. These dollars may not mean a lot to you, but they will likely mean a lot to the recipients. And though you may only be on an entry level salary, you can see how much power you actually have to make the world a better place. This is how you create the habit of giving.


A one percent improvement or a measly $5 in giving doesn’t seem like much. Ideally, you would implement these changes and learn that you have room to implement even more changes.



Even if you only enact these changes, you have set in motion a momentous improvement in your finances that will pay dividends in years to come, with little suffering on your part. Best of all, you don’t have to wait for the distant future to get better at your finances — you can start right now.


Elizabeth writes the blog, The Give and Get, about a Washington, DC-based singleton’s finances. She discusses paying off $112k in student and credit card debt in 18 months, and using her money to build a meaningful life.

Show Comments +