Picture yourself standing at the top of a steep, snowy hill. You reach down and scoop up a bunch of powder, packing it into an icy sphere. Then you lean over and roll that little ball down the big hill. You watch it as it gains size and momentum all the way down until it reaches its ultimate destination as a newly formed, formidable boulder. And it all started with one tiny snowball.
The start of a new year is a great time to start working toward long-term results. Adopting manageable financial habits, like a small increase in your retirement contribution or a review of your budget, in this new year will create a lasting impact and put you on the path to securing your financial future.
Dr. BJ Fogg, a behavioral scientist at Stanford University, developed Tiny Habits, a model for changing human behavior1. Fogg’s model centers around the idea that making a small change is less intimidating, easier to achieve, and ultimately easier to sustain over a longer period of time. The small changes add up, building momentum toward more substantial changes in the future. In other words, these incremental improvements compound over time.
We find the Tiny Habits model is a great blueprint for better financial habits and outcomes over the long term (think of our snowball analogy). The start of a new year brings with it a feeling of initiative and renewal, making it a great time to implement some of these small changes that can create big returns in your own financial well-being.
Here’s a simple one: Increase your retirement or savings contribution by just 1%. Set automated savings that come out of your paycheck before you even see it to make it easier. That’s it! You won’t notice the difference in your disposable income, but you will notice the total amount you saved at the end of the year, and beyond.
What other Tiny Habits can you start? Track your expenses, if you don’t already. It doesn’t have to be a time-consuming process for you. Whether you use a spreadsheet or a budgeting app, identify all your nonessential spending and find a couple of places you can scale back. Are you getting coffee or eating out frequently? Do you have subscription services you rarely use? Those little cuts add up and can free up funds for other financial goals or allocate those extra dollars to paying off debt.
Or challenge yourself to a no-spend week and reset your spending habits by detoxing from nonessentials. Not only will you save money, but it will help build mindfulness around spending. After the week ends, you could build on what you learned by starting a habit of paying cash only for discretionary items. Withdraw a set amount each week and stick to it.
It’s up to you how many of these Tiny Habits you want to adopt in 2025. What matters is that you stick with it. Every small decision you make is a vote for the person you want to be. Set these goals, evaluate the progress each month, and celebrate your wins to stay motivated. Enlist an accountability partner, whether a financial advisor, friend or family member, to keep you on track.
These small steps won’t feel life-changing at first, but when you commit to doing them every day, they are the foundation of long-term financial growth. By focusing on incremental improvements, you’re building habits that will benefit you beyond 2025. At Prime Capital Financial, we are committed to helping you make these small and impactful changes to serve your future self. Let’s get started!
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