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When it Comes to Financial Literacy, Small Steps Add Up Quick

Stacking cake

When I was just starting out my career, I was in the same boat financially as a lot of recent college graduates. My primary focus was making ends meet. For me, this meant making decisions about how much I could afford for rent and managing my day-to-day expenses so that bills got paid on time.

In the back of my mind, I understood that my student loans and a few thousand dollars in high interest credit card debt also needed to be addressed, and that paying the monthly minimum was a bad look. In those days saving for retirement and building up a nest egg was a nice, if seemingly unattainable idea, like summering in the South of France or playing professional baseball. Surely there are people who do these things, but I had no idea how they made it happen.


When I started at the AICPA, I became aware of our financial literacy initiatives early on. I never considered myself to be bad with money, and I always understand the central role it would play in many of my life’s goals. But when listening to our volunteer members give common sense advice, it struck me just how little time I spent actually thinking about the impact of the financial decisions I was making.

Looking back at that time in my life, a number of small steps I took help lay the groundwork for getting me started on the right path. I absorbed a lot of really good advice from reading the 360 Degrees of Financial Literacy and Feed the Pig sites. One of the biggest things preventing me from saving money and keeping me in the rut of living paycheck to paycheck was that I thought the notion of “small changes adding up” was a cliché. Now, I realize I told myself that because making changes seems daunting and routines are easy.

Without knowing where your money is going, you’re flying blind when it comes to your finances. I started my personal financial literacy journey by writing down everything I spent for a three month period and looked at where the money was going. I quickly realized that when I would say “I have no money,” what I really meant was “I’m squandering my money on things I don’t prioritize.”  

The first change I made was cut down on the amount of cabs I took and limit the meals I ate outside of the house during the week. By doing that – which wasn’t nearly as difficult as I thought it would be - I immediately started saving almost $100 a week. This allowed me to pay down my high interest credit card debt much faster. From that point on, I have never paid interest on a credit card. In addition to all the money I’ve saved through the years, it has done wonders for my credit score.

In addition, I was wasting money on my cable bill. I had one of those packages with a nice introductory rate, which had turned into a substantially worse deal after a year while I passively allowed the auto-payments to continue. In fact, I was actually paying $20 a month for a home phone line and I didn’t even own a phone! A quick call to the cable company (from my cell phone) wound up saving me nearly $400 a year by cancelling the phone and various cable channels I never watched.

There were other simple, effective rules I made for myself as I became encouraged by the progress I was making. I realized I was paying almost $20 a month in ATM fees because my bank had so few branches. I found a bank with a branch near my home and my job, and from that point on, it became an extremely rare occurrence for me to pay an ATM fee.

I also signed up for the rewards programs for my preferred hotel chain and airline, and switched my credit card to one that helped me accrue points faster. It took a while, but those points slowly added up and saved me money on many vacations with the free hotel rooms and flights. Even if you only travel on occasion, many programs have points that never expire. It’s easy and simple to sign up.

These things only required a minor sacrifice on my part, and knowing the money I saved was adding up made me feel happier and more secure than I could have imagined. Once my student loan was more manageable, I began putting money in my 401(k) and increasing the rate at regular intervals. I also established a savings account and told myself that once a dollar went in, it would never come out. I’ve had a number of financial missteps over the years, but I’ve remained focused on the small decisions I make in my day-to-day life. I know first-hand that those decisions do add up. And I encourage everyone who feels like it’s impossible to make changes in their financial life to start with one or two small steps.

Financial literacy is a great passion of the CPA profession. Thousands of AICPA and state society CPA volunteers across the country are helping Americans take those first few steps to make better financial decisions. Working to support these efforts through the AICPA’s media outreach to help raise awareness of the importance of these issues has been an honor, and I’ve learned a great deal in the process.

James Schiavone, Senior Manager – Public Relations, American Institute of CPAs 



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