Small Changes That Make a Big Financial Difference

While a complete financial overhaul can work wonders, it isn’t practical for most households. Fortunately, even some small changes make a big financial difference. If you need to take the slow road to success, here are some options that are worth trying.

1. Doing the Math on Your Small Splurges

Most people know that spending $5 on coffee at a café is a splurge, largely because you can spend far less on a single cup at home. However, $5 might not feel like a big deal as a one-off purchase. However, if you’re spending that $5 every week or every workday, you’re likely spending far more than you realize on that one splurge.

Buying that cup of coffee once a week for a year means you’re spending $260 annually at a café. If you do it every weekday (around 260 days each year), you’re paying $1,300 a year for coffee. Those numbers can serve as wake-up calls, making it easier to see how your small splurges impact your budget.

Take the time to look at all of your little spending habits, specifically unnecessary purchases. Add them up over the course of a week or a month. Then, multiply that total to estimate what you’re spending each year. It’s an enlightening exercise, one that may be impactful enough to change your habits.

2. Freeze Your Credit Reports

Freezing your credit reports at each of the three bureaus only takes a few minutes and costs you nothing. However, it can save you a bundle by defending you against identity theft. When your credit reports are frozen, any attempt to open credit in your name that results in a report pull will usually get kicked back since your report isn’t accessible.

While this may seem like it prevents you from opening new accounts, that isn’t necessarily the case. You can temporarily lift freezes at any time, allowing you to open up access for just a day or two while a legitimate pull occurs. Then, your credit report can lock back down automatically after the time period passes.

Technically, this doesn’t result in any immediate kind of financial gain. Instead, it limits the likelihood that you’ll have to deal with the consequences of identity theft, essentially serving as a financial safeguard.

3. Switch to a High-Yield Savings Account

If you have your emergency fund sitting in a regular savings account, the amount of interest it’s earning is likely inconsequential. On average, savings accounts have interest rates of just 0.06 percent. However, by going with a high-yield savings account, you may be able to get eight to ten times that rate. In some cases, you may even be able to snag a 1 percent rate, though that’s fairly rare.

By switching to a high-yield savings account, you significantly boost the money-making power of your savings accounts. Since you need to ensure your emergency fund is highly accessible, it’s a great way to capture some growth from money that’s essentially just sitting. Plus, it’s a passive way to boost your savings, as you don’t have to do anything but open an account in most cases.

4. Take Advantage of Cashback Sites and Rebate Apps

Using cashback sites and rebate apps won’t make you rich, but it will give you a little something extra on purchases you’re making anyway. As long as you don’t allow the details to spur unnecessary spending, you can put a bit of what you spent back into your pocket.

In some cases, you can even double-dip. Certain rebate apps like Ibotta can monitor your email or online accounts to identify purchases, allowing you to apply various coupons or cashback opportunities. With those, you can actually conduct the purchase through another cashback site and effective early money-back twice (or potentially more) on a single shopping trip.

5. Renegotiate Your Interest Rates

If you’ve had a credit card for quite some time, are a customer in good standing, and have a notably higher credit score than when you opened the account, you may be able to negotiate a lower interest rate. Usually, all it takes is a quick phone call and a simple request. Worst case, they’ll say “no,” leaving you right where you are today.

However, if they say “yes” and you typically carry a balance, that could result in a real savings. Plus, it may make it easier to pay off your debt faster.

Alternatively, you could consider looking for a lower rate card that could handle a balance transfer. Just make sure the balance transfer fee doesn’t offset any interest savings. In a similar vein, you could possibly refinance your auto loan or mortgage. While these approaches will impact your credit score, they could be worth considering if the difference is large enough.

6. Save Something, Even If It’s Just $1

Having an emergency fund or a bit stashed away for retirement makes a difference. Even if you have to start small, it’ll add up given enough time.

If you’re cash strapped, begin by setting aside just $5 or $10 per week into a high-yield savings account. That’ll let you build up a cushion, ensuring you don’t have to turn to debt to handle an emergency.

On the retirement side, begin with just a 1 percent contribution if you don’t have much room in your budget. Along with letting you get something set aside, you may qualify for a tax deduction and a small employer match, making that 1 percent count for just a bit more.

7. Round Up Your Debt Payments

If you want to tackle your debt and want to keep things simple, rounding up all of your payments to the nearest $5, $10, or $100 can be an easy way to make headway. While it may not be as efficient as the debt snowball or avalanche methods, it does help you chip away at your debt quicker than you would if you stick with the minimum payments. Plus, it simplifies budget tracking, as you aren’t dealing with any strange numbers for your debts.

Depending on the debt type, you may need to contact your lender to ensure the extra amount is applied to the principal. While that may be automatic with some debts, others may apply the extra to the next month’s payment instead, which isn’t as efficient at reducing the interest you’re paying. Usually, you can find out how the lender treats the excess amount with a phone call. Additionally, they can tell you what you need to do if the extra isn’t applied to the principal automatically.

8. Embrace the 72-Hour Rule

When you get the urge to splurge, apply the 72-hour rule. Essentially, you agree to wait 72 hours before you actually move forward with the purchase. This gives you time to determine if the item is actually worth buying or if you were caught up in the moment.

Since the latter applies far more often than people expect, you’re essentially walking away from an unnecessary purchase. It also teaches you to think about why you were driven to want something, increasing the odds that, if you do move forward with the purchase after 72 hours, it’s actually a decent idea.

9. Avoid Food Apps with Fees

While ordering a meal for delivery or pickup through apps like DoorDash, UberEats, or similar services is convenient, that ease comes at a cost. Those platforms have multiple fees, including a big service fee that you can’t get away from even if you pick up the food or have a free delivery coupon code.

If you genuinely want a meal from a local establishment, look for alternatives to those services. You could contact the restaurant directly to place a to-go order or use its own app. Since you aren’t dealing with the platform service fee, it can save you a few bucks every time.

10. Ditch One Bad Habit

Whether you’re a smoker, love your soda, or like to close out the week with a binge at the bar, that habit costs you. Along with the financial burden of supporting the practice, activities like that aren’t great for your health. By telling just a single habit, “goodbye,” you could end up with more in your wallet and a healthier life.

Even cutting back can make a difference. If you reduce your consumption by half, you could end up with a surprising financial gain. Plus, if you put that money in an interest-bearing account, it’ll keep growing, helping you achieve other financial goals.

Can you think of any other small changes that make a big financial difference? Have you made some of the adjustments above before and want to tell others about your experience? Share your thoughts in the comments below.

Tamila McDonald

Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.

10 Small Changes That Make a Big Financial Difference