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  • Writer's pictureMaureen Decker

Tiny Changes Can Help You Achieve Savings Goals

Updated: Jan 23, 2023

Many individuals may be tempted to be aggressive when crafting savings goals for retirement, so that they can accelerate their financial outlook. Research has shown, however, that it could have the opposite effect. Overly ambitious goals can be intimidating and deter people from sticking to them. Instead, it may be beneficial to consider making smaller changes. This approach may be especially helpful in 2021, as many people attempt to recover from the financial hardships of 2020. Here are tiny changes that you can implement in your daily life that can lead to big results.

Set the Bar Low

People may unintentionally set themselves up for failure by selecting goals that are vague or far-reaching to achieve, such as “improve my financial health”. The key is to link your goals to specific actions. Instead of stating that you want to improve your financial health, focus on a specific area, such as establishing an emergency fund. Once you zone in on what you want to achieve, start with a realistic first step. If you want to start building your emergency fund, aim to put $500 into the account within a specified time period. By establishing a modest goal, you can ensure that you will stick with your habit if an unexpected event arises.

Focus on the Positive

While it can be tempting to dwell on your mistakes, focus on the small steps you are taking now. There is nothing that can be done to change the past and old financial habits, so your energy is best spent looking forward.

Calculate the Impact of Small Changes

Someone who earns $50,000 a year and invests 1% of that annually will have almost $19,000 in 20 years and over $77,000 in 40 years, assuming a 6% annual return**. Reducing your investment fees can also have a substantial impact over time, so shop around to ensure you are paying costs you are comfortable with.


When looking for ways to tighten your budget, avoid cutting out things you enjoy. While saying goodbye to your daily Starbucks run may sound like a good idea, in reality it may make you feel deprived. To save more, focus on cutting back on areas that require little effort, such as cancelling unused subscriptions or negotiating a discount with your cell phone provider. These tiny habits can lead to larger saving strategies in the future, such as refinancing a mortgage or negotiating rent. This way you can cut out on unnecessary expenses without eliminating the things you love.

One Step at A time

Saving for retirement can be done passively, via payroll deductions to a 401(k) or automated transfers from a savings account into an IRA. Setting up these automatic transfers can be as easy as calling your bank or talking to your employer. If the action cannot be automated, take one step at a time, even if it is something as simple as creating a login with a brokerage firm or making a call to a trusted financial advisor. Every step is a step in the right direction.

Celebrate the Wins

People often underestimate the effort it takes to change a habit. Congratulate yourself on the small wins.

**Assumes $500 invested per year earning 6% compounding interest. Hypothetical example - Not reflective of any investment or strategy. Investing involves risk, including loss of value. Results may vary.


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