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I’d rather be dreaming…

If you haven’t read it already, ‘The Slight Edge’ by Jeff Olsen is a must read. It essentially encourages us to takes small actions, consistently over time, to create success in our lives. It’s not about massive action but simple, easy to do, disciplines in your daily life. The trouble is, these simple easy to do actions are just as easy not to do. Daily small decisions that seem relatively insignificant, compounded over time, make all the difference between success and failure.

Desire is nothing without discipline.

If you write one hundred words a day, in two years you’ll have written a full-length novel. If you over-pay on your mortgage by £100 a month you could pay off your mortgage 40 months earlier and save £15,000 in interest (based on a £200K mortgage over 25 years at 3.5% interest). If you exercise for as little as 30 minutes a day for a year, you would have significantly improved your health.

It’s so easy for us to overestimate what we can accomplish over a day or week, yet completely underestimate what we can accomplish over the course of a year or several years.

The choice: A regular cup of Joe, or a romantic week away forever?

Let’s take an example of a 35 year-old who decides to start saving money. If they put the £2.25 a day spent every day on a cup of coffee into their pension pot instead, at age 65 with compound interest and based on today’s prices, they could expect to get almost £2,000 more every year for the rest of their lives. That must be worth avoiding your caffeine fix for? If they also found another £60 per month to save by making shopping lists before hitting the shops or cutting down on utility bills, that would increase the pension from 65 to over £3,600 per annum. Not bad for a small amount of cutting back. Is it easy to do? Yes. But, it’s also equally easy not to do. Will these savings make a difference over one week or one month? Not really. Will they make a difference over 5, 10 years or longer? Definitely.

Here’s the maths: someone spending £2.25 on coffee every day is handing over the equivalent of £68 per month for the luxury. If this was invested in a pension, it would amount to £85.55 per month gross and, using this pension calculator, you would have just over £39,000 in your pension pot at age 65 (in today’s terms) which could provide you an annual income of £1,921.

“Successful people just do the things that seem to make no difference in the act of doing them and they do them over and over and over until the compound effect kicks in.” Jeff Olsen

Honey, I’ve shrunk the decisions

It’s the small decisions made every day that change your results. It’s not that we don’t know how to create more success in our lives, it’s more about not following through on the action consistently enough. Now factor in additional savings that you could make if you made management of your finances a number one priority. If you made small rules for yourself, like using budget shops for some of your grocery shopping, or saving every £1/£2 coins you get, or walking instead of taking the bus, the money starts adding up. These actions, compounded over time can make an enormous difference to the state of your finances and your health.

The price you pay for neglecting to do the things that are important to you is far higher than the price you pay for taking action. It’s easy to put off because if you don’t do it, it won’t kill you. But that error in judgement compounded over time may just destroy your chance of success. Small actions may not feel like much, but they make all the difference.

Embrace Habit Hacking

The Slight Edge is a great philosophy to live by. A proven principle that when you make small Slight Edge decisions that work for you (rather than against you), you change the results in your life.

So here’s a simple easy-to-adopt approach: try to attach small positive habits to improve your existing habits. You’ll then start to create Slight Edge actions which are more likely to stick. Here are some examples:

  • Before checking social media, check your bank balance. That way you’ll be more in the picture and less likely to spend what you can’t afford.
  • When ‘popping to the shops’, walk there rather than taking the car or bus. Appreciate the time. It’s better for your health, and you can save money by planning what you need on the way, while also saving fuel or travel costs.
  • Save your £1 or £2 coins separately from your ‘change jar’. Cash will soon accumulate without you feeling the pinch.
  • When renewing a supplier, e.g. insurance, quickly compare the market. Never automatically renew with your existing providers. You can make massive savings that totally justify the work involved in switching.
  • Set up text alerts with your bank so that you avoid going overdrawn and paying bank charges.
  • Use debit cards instead of credit cards so that you don’t spend more than you have in your account.

Try adopting the mind-set of the Slight Edge approach into your daily habits and you’ll start to see the difference. Let us know your ideas for habit hacks. We’d love to share these with other readers.

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