25 Apr Bringing Your Future Into Your Present: Your Small Choices Matter! (Part 4)
The Power of Small Choices
All too often, we rationalize that a small decision we make won’t make a difference. We believe it’s the big decisions that will have a long lasting impact on our lives. Our real challenge is that too often we either don’t understand or can’t see the huge impact small choices have on our lives. We understand the impact when the results are irreversible. Whether it’s how we speak to those closest to us, how we spend our time or how we spend our money, the repetition of small steps will have a big impact on our lives.
Start by Knowing Your Positive Cash Flow
Each month, after you pay all your living expenses, how much money do you have left? This is your positive cash flow. The larger the number, the more you will have to spend on experiencing what’s most important to you. Whether it’s having the money for the dream vacation or having the freedom to be generous, experiencing your dreams begins and ends with knowing your positive cash flow and spending each dollar where it’s most important.
Simple Illustration – Power of Compounding
Earlier, in my earlier six part series, ‘Using a Line of Credit to Eliminate Student Loans’, I used an example of a recent college graduate with $450 of positive cash flow. After taxes and deductions, the student is paid $1,425 twice a month. He has monthly student loan payments totaling $539 and a savings balance of $5,500. Over the next 15 years, our graduate’s income will increase two percent.
The Impact of Small Choices Using CashMap
If you’re this student and you make the following small decisions, look at the impact your decision will have in fifteen years.
You Aggressively Pay Off Your Student Loans: Your loan is paid off in four years and in fifteen years your savings total $137,808.
You also make the following additional decisions.
You Save 50 Percent of Your Salary Increase: Your loan is paid off two months earlier and in fifteen years your savings total $181,763.
You Spend $35 Less Each Month on Food: Your loan is paid off a total of five months earlier and your savings total $186,611.
You Get a Part Time Job Earning $600 Each Month for 5 Years: Your loan is paid off a total of 21 months earlier and in fifteen years your savings total $240,823.
These decisions appear small; however, over time they had a big impact. You saved almost $100,000 more! Choosing where you wanted to spend your dollars was important. Each choice increased your positive cash flow enabling you to make big steps in achieving your dreams.
Thanks for joining me. I’d love to hear from you. To learn more about how to keep your dollars working for you 24/7, let’s chat. The concepts are easy but they’re a bit counterintuitive. Take advantage of our articles, interactive materials, videos and, e-books. Please send your questions, topics or suggestions to firstname.lastname@example.org. You can also follow me on twitter at cash_map.