Building Financial Momentum When You’re Struggling to Make Ends Meet

This past weekend, I was cleaning out the closet in my office when I came across some of my old journals from the late 1990s and early 2000s. In that timeframe, I barely had any money at all. I had a minimum wage part-time job and was trying to work my way through college. At one point, I lived in a two-bedroom apartment with several other people and my worldly possessions fit in my backpack and a single plastic storage container.

Most of these journal entries were concerned with figuring out who I was and where I was going in life. It all centered around transitioning from childhood under my parents’ roof to adulthood on my own.

What surprised me, though, is how many of the financial principles I use in my current financially stable adult life were already in place back then. In almost every page, I see some little hint of smart spending decisions and wise financial moves.

The vast majority of those moves were very little things, but as I flipped through the pages, I often saw those very little moves slowly grow into some degree of financial momentum. Many of those little moves culminated in enabling me to keep my student loans smaller than they could have been, and that alone transitioned into an easier financial path going forward.

There’s a big financial truth: Every little tiny money move you make alters your direction a little bit, especially when you don’t have much income to begin with. It doesn’t really take much at all to start building financial momentum, even when things seem hopeless, even when you’re living in a tiny apartment with several other people and living out of a storage container and wondering if you’ll be able to eat this week.

What follows are some of the core principles I learned from reviewing those journals over the last few days. They all come from a point in my life where I was effectively living on a minimum wage part-time job, sharing an apartment with several other people, and eating about as cheaply as humanly possible to survive and try to set myself up for whatever success I could in the coming years.

The Most Important Step: No Excuses

The most poisonous thing you can do when trying to succeed is to blame others when you fall short. Period.

Yes, there are many instances where you can try really hard and still fall short because of things outside of your control. It happens. That’s part of life.

However, the lesson to take away from such situations is not blaming others or blaming outside forces. All that does is give you permission to not do your best.

Rather than saying, “I failed because of reason X which was outside of my control,” you should be saying, “I could have done this thing differently which would have reduced the chances of X derailing my plans, and I’ll do it differently going forward.” That should be your approach whenever anything in life fails, whether it seems to be your fault or not.

You cannot fall into the trap of letting failure as a result of things outside of your control excuse you from doing the absolute best you can regarding the things that you can control.

If your job is terrible, what can you do to make it less terrible or to move into a different job?

If your bills are too high, what can you do to reduce those bills?

If your car breaks down and drains what little savings you have while damaging your reputation at work and eliminating a day’s pay, what can you do to ensure that you get to work next time?

Every single unfortunate event in your life should be examined not in terms of where the blame falls, but in terms of what you can do to minimize the negative impact on your life, both this time and in the future.

Bad things are going to happen. It’s part of life. Things are never going to go perfectly. The best approach is to look at yourself and ask yourself what you can do to wind up in the best position after that bad event.

Never, ever fall into the blame game. Never, ever wallow in pity for your unfortunate circumstances. Those things ensure that you’ll get blindsided and knocked down again the next time around.

You Can’t Walk Forward if You’re Constantly Taking Steps Backward

Financial success isn’t just about making good financial moves. It’s just as much about not making bad financial moves.

You can make a good financial move every single day, but if you’re making just as many bad financial moves, you won’t go anywhere. You’ll stay right where you are.

Make good moves, but make sure you don’t make bad moves. Spend less, but then don’t immediately spend it on something unimportant elsewhere. Work hard, but don’t turn around and slack off the next day.

There are times when your financial journey is going to feel frustrating and endless, and it is so tempting to just go do something “fun” and to “live a little” and spend money on something that’s quickly forgotten but washes away all of your progress.

It’s going to take willpower to get past those moments. There is no magic recipe. However, if you don’t get past those moments, you will never succeed in the long run.

My best tool for willpower in those days was to simply step back and think about the future that I wanted. Honestly, it’s basically the same tool I use today to help with willpower. I sketch out the bright future I want in detail. I let myself float along in that daydream for a bit, and then I ask myself which of the choices in front of me, right now, leads me toward that beautiful picture and which choices lead me away from it. There’s no tool I have in my repertoire that’s more powerful than this when I have a spending choice before me.

Take Tiny Steps

There are simply points in life where there’s nothing to cut.

At this point in my life, I lived in a tiny apartment with a bunch of people. People sleeping in sleeping bags, people on the couch, and so on. I ate a ton of ramen noodles to survive because you could buy them for 12 packets for $1 at the local discount grocer. I also ate a lot of free food by going to any and all meetings that provided food or snacks. I didn’t have a car and usually walked to work, occasionally riding the bus if necessary. I had about six changes of clothes and would usually wash them in the bathtub. There was nothing to cut without becoming homeless or not eating or something.

What I tried to do during that timeframe was to save every cent I possibly could.

I would look for change on the ground and pick it up, and each night I’d put all of my pocket change in a jar (both found change and change from any purchases).

I would try to go for days without eating food I had paid for. I didn’t steal, but I would go to pretty much any free public event that had food available. I’d go to grocery stores on sample day and just walk through the store a few times eating every sample. Where I worked, there was usually fruit and coffee sitting out free for the taking, so I enjoyed them both. At the end of any day where I didn’t buy any of my own food or drink and found sources elsewhere, I’d stick a dollar in my change jar.

Whenever I actually needed something, I would shop at the Goodwill and the Salvation Army within walking distance of my apartment. My wardrobe basically consisted of gifts mixed with Salvation Army and Goodwill items. Again, any change I brought home would go in my change jar.

My parents would still buy me Christmas gifts, so I would ask for very practical gifts, like underwear and socks and shoes and a coat and such. This avoided gifts that I wouldn’t have any use for while also minimizing the amount I needed to spend on practical items. Any cash gifts I received would go into my change jar.

Read more: A Guide to Extreme Food Budgeting

Turn That Progress Into Slightly Bigger Steps

When my change jar was full, I’d take it to the bank and deposit half of that money into savings. (I’ll get back to that in a second.) I’d take the rest and put it toward something that would save money over the long run.

For example, I might use the money to buy a bus pass rather than straggling for change. I lived a few miles from my classes and from my job, so I would often need to take the bus to get to work and to class and to get home. I didn’t want to have to use a car and there were many days when walking was just impractical. The end result of this is that I would often have more change in my pocket – I wasn’t dropping quarters into the slot on the bus, so that change stayed in my pocket.

A friend of mine had a warehouse club membership, so I would take advantage of that to buy my share of household supplies. I was supposed to buy toilet paper and dishwasher soap. Instead of buying six rolls of toilet paper at the store, I’d buy a 48-roll package at the warehouse club for only maybe three times as much as the six-pack. I’d do the same with the dishwashing detergent. That was pure savings that, again, left more money in my pocket.

At one point, I was able to buy a used bicycle off of someone for $10 or so, which became my primary transportation. I basically only used the bus on days where the weather made biking impossible. Again, this was a money saver – my transportation costs basically went to zero for more than a year.

The goal, really, was to stop pulling money out of checking so that my paychecks would build up in there while also filling up my change jar a little more frequently. I took pride in not opening my checkbook or using my debit card or credit cards. I took pride in filling up that change jar as fast as I could.

There are a lot of additional steps I might have taken at different points in my life to turn those tiny steps into something bigger. I might have bought a few basic things for my kitchen to make really cheap food prep easier, like a cheap plastic cutting board or some lunch containers or some containers to put meals in the freezer (so I could do things like make a giant pot of soup and then save it in batches for later). I might have bought some LED light bulbs if I knew I was on the hook for the electric bill, which would cut that light bill for as long as I lived there (naturally, I take those LEDs with me when I move, putting the original bulbs back in the sockets when I move out). It’s all about using those little steps to fuel bigger steps, and then using those bigger steps to fuel even bigger steps…

Turn That Progress Into Even Bigger Steps

Over time, even as tight as things were, money did build up in my checking account. I was withdrawing as little as possible and I was putting money in there from my change jar and my paychecks. It was building up.

What did I do with it? I got smaller student loans. That was the biggest change. In one of my journal entries, I found a long description of a student loan decision in which the money in my checking account – built up over time thanks to all of these choices – helped make the case for me to request a smaller allotment of student loan money.

In someone else’s story, that might equate to a smaller car loan or maybe even paying cash for an older used car. It might equate to buying your own washer and dryer so you don’t have to go to the laundromat to wash your clothes any more. It might equate into some nice professional clothes so that suddenly you stand out a little at the office and your good work gets noticed more (this depends a lot on the career, of course, but it’s still possible). It’s all about small steps turning into slightly bigger steps, and those into slightly bigger steps.

Start Protecting Yourself Against the Unexpected by Planning for Points of Failure

One thing you need to start doing is protecting yourself against the unexpected.

What do you do if your car won’t start in the morning? What’s your game plan? How do you get to work or to class without being late?

What do you do if you get sick? What do you do if you get fired? What do you do if your roommate bails on you?

Those things are setbacks, definitely, but they’re setbacks you can plan for so that the impact isn’t nearly as bad when they do happen. Because, and here’s the real truth, bad things like that will happen. There will be a day when your car doesn’t start. There will be a day when you’re sick and need some medicine. There will be a day when you get fired. There will be a day when your roommate bails on you.

The best thing you can do is take some of the cash accumulated by those little steps and put it aside. Put it in a savings account, or under your mattress, whatever you need to do. Cash is king. Cash solves problems. Cash pays the rent. Cash pays the mechanic. Cash buys the medicine.

Having that emergency cash means that something that could be a crisis, something that could cause you to lose your job or get evicted or something bad like that, doesn’t become a crisis. It just becomes a much smaller setback. It’s much less of a problem to deplete a savings account temporarily than it is to get locked out of your apartment or to get a pink slip.

Have a plan for the crises that might pop up in your life. Have an emergency fund. Know what you’ll do when that bad thing happens. That way, something that could be a complete disaster turns into just a relatively minor setback. Rather than seeing everything fall apart, you can just keep taking little steps and make that ground up faster than you think.

The End of the Story

It’s interesting to see how those frugal choices that I made two decades ago still affect my life today.

Things like finding change on the sidewalk and returning found nickel cans for the deposit added up to buying my clothes at Goodwill.

Buying those cheap clothes resulted in things like buying a bicycle to save on commuting costs.

Riding that bicycle each day instead of paying for the bus or paying for a car resulted in having a couple hundred dollars to apply toward tuition, which meant a smaller student loan.

A smaller student loan meant that less interest accumulated on that loan while I finished school, which meant an even smaller bill when I graduated and started paying it off.

A much smaller total student loan bill meant I was able to pay the whole thing off much faster than I would have otherwise, even with my much higher income after graduation.

Paying off those student loans faster than I would have otherwise made it possible for us to be ready to buy a home earlier than we would have otherwise been able to, and thus we paid less for that home, and thus we were able to pay it off even faster.

The simple fact of the matter is that I am able to trace some of the big financial benefits in my life today back to picking up nickel cans and eating ramen noodles when I was in college.

Yes, there were many mistakes. There were many bad steps along the way. There were many unexpected events and crises. Things didn’t go perfectly.

However, the impact of all of those negative things was made smaller by the constant flow of little positive steps moving forward, and then translating those little positive steps into bigger ones, and bigger ones, and bigger ones. It took a decade, but it impacted the speed of my student loan payoff, and that resulted in part, over the next five years, in home ownership and then the full payoff of our mortgage.

It takes time. It takes patience. It takes constant steps forward. It takes looking at your own behavior for the best answers you can find.

Everyone has to start somewhere, sometime. Start where you are, today.

Read more by Trent Hamm:

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