June 24, 2025 • 22 mins
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In this episode of the Debt-Free Dad podcast, Brad Nelson, and his co-hosts Chris Hawkins, Katie Hatfield, and Ryan Nelson discuss the importance of small wins in achieving financial success. The hosts share their personal debt payoff stories and emphasize how minor actions and consistent efforts can accumulate into significant progress over time. They draw inspiration from Darren Hardy's book, 'The Compound Effect,' highlighting how hundreds, thousands, or millions of small actions separate the ordinary from the extraordinary. Listen in for motivational tips, examples of small wins, and strategies to boost your financial confidence and momentum. If you're looking to break free from living paycheck to paycheck, reduce financial stress, build savings, and gain tools for financial freedom, this episode is a must-hear.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Brad Nelson (00:00):
Have you ever felt like fixing your finances is
this huge, overwhelming mountainyou'll never be able to climb?
Like no matter how hard you try, it's never enough to feel like
you're really getting ahead.
Here's the truth Big changesstart with small wins.
So in today's episode, we'regonna be talking about why those
tiny steps and tiny wins matterso much and how they're the key
(00:21):
to feeling better about yourmoney right now.
Not someday, but today.
Whether you're trying to savemore, pay off debt or just stop
feeling stuck, this episode isgonna help you see how small
wins can add up to big results.
Announcer (00:37):
You're listening to the Debt-Free Dad Podcast with
Brad Nelson.
Brad and his co-hostsexperience the anxiety of living
paycheck to paycheck beforelearning the fundamentals of
financial success.
They are now on a mission toempower regular people to pay
off their debt for good andenjoy happier, less stressful
lives.
Keep listening forinspirational interviews, tips,
(00:59):
tricks and practical advice togain financial freedom.
Brad Nelson (01:05):
Hey guys, welcome to today's show.
My name is Brad Nelson.
I'm the founder of Debt FreeDad.
I paid off about $45,000 ofdebt and I've been debt free now
for more than 12 years.
I've also helped thousands ofother people save and pay off
tens of millions of dollars withthe work that we do here at
Debt Free Dad.
Chris Hawkins (01:20):
And my name is Chris Hawkins, and my wife and I
began our journey back in 2005.
We're coming up on almost 20years of doing this, and we have
been debt-free since 2008.
Kati Hatfield (01:32):
And I'm Katie Hatfield and I am still paying
off my debt and getting to debtfreedom and in the last seven
years, on a single income, Ihave paid off $222,604 in debt
and saved so much more.
Ryan Nelson (01:50):
And my name is Ryan Nelson.
My wife and I paid off $160,000over eight years while we were
raising three kids.
Brad Nelson (01:56):
So after listening to this episode, if you are
ready to take things to the nextlevel.
You want to break free fromliving paycheck to paycheck, you
want to reduce financial stress, you want to build savings and
finally pay off your debt forgood, but maybe you're not sure
where to start.
We've created some incrediblefree resources here at Debt-Free
Dad to help you get there, andwe'll be sharing some details
about those later on in today'sepisode.
So, guys, today I love thistopic.
(02:18):
Probably one of my most favoritethings to talk about when it
comes to finances is the powerof small wins and one of my
favorite books I shouldn't sayit is my favorite book.
I've read it tons of times,I've listened to the audio tons
of times, and it's called theCompound Effect by Darren Hardy,
and it's not a very long book,but it literally you can take
(02:41):
this thing and apply it toeverything in your life.
And the whole book, the wholething, is about this idea of the
power of small wins.
And one of the quotes thatDarren Hardy has and I wanted to
share this here as we kick offthe episode he says it's not the
big things that add up in theend, it's the hundreds,
thousands or millions of littlethings that separate the
(03:02):
ordinary from the extraordinary.
That's just so true, and I thinkthat's one of the things that
keeps a lot of people fromgetting started is that they
sometimes will sit back, and Iknow I did this.
You look at the mountain youhave to climb right and you look
at this huge thing and it'slike how am I ever going to do
that?
It feels so intimidating and itmakes you just feel stuck and
(03:26):
you don't even want to do itright?
So what a lot of us do and youguys can probably talk about
this, you know, we stick ourheads in the sand and we just
ignore it We'll figure that outlater because it's just this
huge monster that you don't evenwant to deal with.
Ryan Nelson (03:38):
I know we're talking about small wins today,
but when you look at your debt,especially when you first add
everything up and you just get avisual of where you're at and
it's super scary and you're like, oh my gosh, I'm never going to
get out of this.
I think sometimes what weforget, just like small wins add
up, those small little mistakesthat you've been doing over the
past 20 years, 30 years, thosealso add up.
(04:00):
And it's the same concept.
We don't think of the $5 here,the $10 here, the $50 a month
here.
None of that matters untilwe're in this position where now
it's like, oh my gosh, we'vegot this huge pile of debt and
we're never going to get out.
And the way you're going to getout is the same way you got in
it's just by small wins.
Except we're going to just doit in reverse Instead of making
small bad decisions, we're goingto make small good decisions,
(04:21):
and we're going to just keepdoing that over and over and
over again.
Chris Hawkins (04:25):
Yeah, one of my favorite quotes from Ben
Franklin is small leaks sinkgreat ships, so it doesn't have
to be something big, it's alwaysthe little little things or
death by a thousand cuts.
And so, yeah, the opposite ofthat, obviously, is how you get
out of debt.
It's the little things that putyou there.
It's the little things that aregoing to get you out.
I do want to reiterate, ifyou're listening to this podcast
, the Compound Effect is alsoone of my favorite books.
(04:47):
I give it to people as giftsall the time and it mentions and
they're the same thing thatRyan just talked about is you
are the culmination of all thelittle decisions that you've
made.
Okay, and most of thosedecisions are small, they're not
big ones, so they challenge you.
In the book he does if youremember this, brad to identify
the two or three things that putyou in that position and then
(05:08):
what are two or three positivethings that you can do to get
out of that?
And this is a simple book onstop doing these three things
and start doing these threethings and do them consistently
over a long period of time, andyou will undo all the bad things
that you've done, sometimes ata much quicker timeframe than
you did when you got there.
So I'm a big fan of the smallwins.
(05:29):
That's exactly how you're goingto get out of debt.
That's exactly how you're goingto build wealth, and it makes
it fun when you can.
You know $10 here, $20 there.
It seems like it's a smallnumber but it's like, yes,
there's another $10 to puttowards that debt.
There's another $15.
Or I decided to eat at hometonight instead of eating out
(05:50):
and save that $15, $20.
It was $15 back when we weretrying to get out of debt.
Now it's probably more like $40to go out and eat for two
people.
But you get the point.
Small things.
But go get the book theCompound Effect, order it on
Amazon.
Go to Barnes Noble localbookstore, get it.
And when he tells you to dosome exercises, to do some
(06:11):
thinking and write some stuffdown on paper, do it.
Yeah.
Kati Hatfield (06:15):
I would say I definitely would not have stuck
around for seven years and paidoff over $222,000 in debt if I
wasn't tracking all the littlewins along the way, because I
still look at that number and gohow?
How did that happen?
How have I been able to makethat much of an impact on
something that stressed me outfor 35 years?
(06:37):
So yeah, every little smallthing does add up quickly and
we've said on the show a numberof times in order to waste
$10,000 in a year, you only haveto spend about $28 a day at the
coffee and lunch and dinner atthe drive-thru.
(06:58):
Easily.
If you were finding $25 to putaway in savings, you could have
$10,000 saved in a year.
Brad Nelson (07:07):
I went to Jimmy John's today, by the way, $26
and some change for twosandwiches, a bag of chips and
two sodas.
I was like, oh my, I don't eatout that much.
So that's just like.
Oh my gosh.
And my son always makes fun ofme.
He's like is this the firsttime you've ever been out of the
house?
It's crazy, but it's true.
I think.
Why small wins?
I think the biggest reason whythey're so important is because
(07:29):
it builds confidence and itbuilds momentum, and so many
people, obviously, when they'restarting to get a debt, they're
starting to improve theirfinances.
We have none.
We have no confidence, we haveno momentum, because we're so
used to always playing defenseand getting our teeth kicked in
all the time.
Right, we're constantly hit bythis crisis or this bill or this
one, and it never feels likewe're actually able to really do
(07:49):
anything meaningful.
And when you're constantlygetting beat down all the time,
it just feels like you're notgetting anywhere.
So that's why doing one littlething, one win, just in focusing
on that, that's one of thereasons on this show, we have
the celebrations of the show atthe end.
That's the reason, you guys,because those small wins are
(08:10):
just so important.
And the other thing, too, is alot of people, because of these
small wins, because it starts tobuild confidence, because it
starts to build momentum, itstarts to become a little bit
more fun.
We've even had people saythey're addicted to now paying
off debt, like they cannot waitto pay off the next one.
Because it's this huge feeling,it's an awesome feeling that
they get to check something off,because psychologically, your
(08:32):
brain loves to see that progress, even if it's just a little bit
, and that's one of the reasonswhy I think, for instance, the
tool that we always teach is thedebt snowball.
I think that's why it's themost effective From a
psychological standpoint.
You're seeing progress, you'rechecking things off.
Like Chris, you mentionedbuilding wealth.
You don't build wealthovernight.
Most people don't inherit it,win the lottery or do anything
(08:54):
like that.
Most millionaires are self-madeand it's made by putting money
away every single month.
Not a huge chunk all the time,but putting away 10%, 15%, 20%
of their income, maybe more,depending on what their
situation is, and just puttingthat money away every single
month and when they first startthe compound interest that
they're building, it doesn'tlook like much.
(09:14):
In fact, you might even saythis isn't even worth it.
But if you look at it from 20,30, 40 years from now, it's at
the end where it starts toexplode.
And someone might say, well,they're an overnight success,
they're a self-made millionaire,but they don't see the years of
discipline that it took them.
All those little tiny wins thathappened basically summed up
this huge amount of wealth thatthey've now built.
(09:34):
And you hear these stories allthe time about these little old
ladies that pass away.
No one ever knew that they hadall of this money Millionaires
you never would have known it,but a lot of them again.
It just came from consistencyputting away money every single
month, stacking their small winsand eventually have this huge
win.
It's incredible.
Ryan Nelson (09:53):
People that do this , that share their small wins,
and a lot of times you'll see atthe beginning, when they first
start sharing I know it's not abig deal, but I was able to save
$50 this month and you'll lookat those people in 12 or 18 or
24 months and what started offas, oh, this isn't a big deal,
it just starts to snowball onitself and suddenly those people
are like I've paid off $20,000in debt and I've saved $5,000.
(10:16):
Because sometimes when youreduce to share those
celebrations, I think peoplelistening like, oh, they saved
100 bucks.
Wow, that doesn't seem like alot.
Well, it's consistently.
You keep doing that andsuddenly over 24, 36, 48 months
in Katie's case, seven years itadds up to $222,000.
So it's like, yeah, at thebeginning it might not seem like
(10:38):
a big deal, but you do itconsistently over a period of
time and boom, it adds up andyou start to capitalize on it
over and over again.
Kati Hatfield (10:44):
Right, I also love the snowball stickers that
are in the debt-free dad inRoots and the planner, because
stickers are fun and when yousee all those stickers on there
it's like gold star for me thisweek.
And little things add upbecause for about five years I
had been putting away just $50 amonth in a Roth IRA and I
(11:08):
stopped because I was gettingout of debt so I stopped
investing.
That account is now $17,000plus and I was like, oh wow, I
guess the compound effect doesreally add up over time.
And now that I am getting outof debt more and have decided I
also need to start reinvestingagain, it's just going to grow
(11:31):
that much because I still have,hopefully, 20 years left before
retirement and 20 years is agood period to get that compound
interest.
Chris Hawkins (11:42):
I definitely was one that gamified it big time.
I've talked about that on thispodcast.
I've even done a couple ofindividual podcasts on this
subject about gamifying yourdebt, because we all like to win
, we all like to play games, andhere's the cool thing is, you
can sort of set the game up theway that you want it.
So don't think of it as$100,000 worth of debt.
(12:04):
Maybe think of it as I've justgot to come up with a hundred
ways to come up with a thousanddollars.
If you can make the numberssmaller, they're much more
achievable.
Or I've got to come up with athousand ways to come up with a
hundred dollars and you go okay,I can come up with a hundred
dollars.
That's not that difficult, andthat's why, for me, I was always
(12:26):
so excited when my foodenvelope had money left over at
the end of the pay periodbecause that was more money to
go towards a debt, and so Itreated every dollar as if it
was a point in a game, and Ikeep doing that.
I still do that to this day,even though I have no debt.
It's just on the positive sidenow, and I am a testament that
(12:47):
small things, whether you'regetting out of debt or whether
you're building wealth.
You can do tremendous,tremendous things by just doing
it a little bit at a time.
Brad Nelson (12:57):
Yeah, chris, you brought up point system.
Katie, you brought up stickers.
I think this is where the valuereally comes from Not only
focusing on small wins, but alsotracking those small wins too.
And this is so important injust every area of your life,
like, for instance, in thisbusiness.
I mean, we've been working hardat trying to grow this business
and we're just at like thisstall point.
I'll tell you guys honestly,it's frustrating.
Ryan and I Amber, we're workingfull-time here on Debt Free Dad,
(13:20):
trying to get this thing to go.
We want more members.
We're pushing and pushing andsometimes you don't get the
results that you want to see andit gets frustrating.
We've had some hard days, right, and it's like getting out of
debt.
I look at it like getting outof debt.
It's not always going to goperfect, it's not.
You're going to have some harddays, you're going to have some
hard weeks.
You're going to have some hardmonths sometimes, and if you
(13:40):
don't have any proof of progresslike you haven't been tracking
your small wins if you don'thave something, like Katie said,
I can go back to my debtfreedom success path kit that
she got when she joined Roots,like with all of her debt
snowball stickers.
I'm just, I'm just in a toughspot right now, like things are
going to move in the directionthat we want them to.
It's unfortunately just nothappening in the time that I
(14:00):
want it to, right, and so itcould be easy, without any
tracking, to say I'm going tothrow in the towel, like we're
going to quit, we're going togive up because this isn't
working.
That's not necessarily true,right?
Maybe you just have to shiftyour mindset, maybe you have to
do something different, right?
Maybe you have to get drasticand make some bigger changes in
your life to get money moving,to free up cashflow, to start
(14:23):
making better progress, butwithout any proof of progress,
it's easy just to say this isn'tworking, I give up, but
meanwhile you have been makingprogress.
And this is where a lot ofpeople kind of get in the cycle
of this constant.
You know, fits and starts.
Right, they'll start, they'redoing good for a while,
something bad happens, they stop, then they get the energy to
start again and then they stopright, and it's just back and
(14:44):
forth and they never really makethe progress that they want
because they're not reallytracking their progress very
well.
Kati Hatfield (14:50):
And I would say when I started getting into
Roots, I didn't have any savings.
So getting that first $1,000 ina savings account was a huge,
huge success for me, because I'mlike wait, I've never had a
savings account like this.
This has a comma in it.
Come on guys, this doesn'thappen to me, and now I've been
putting away for seven years,$100 a month from my paycheck
(15:14):
Just automatically goes off intosavings, so I have more than
two months worth of income.
So if something did happen, I'mnot like, oh my gosh, I have to
run out and get a new jobimmediately.
I have a little bit of acushion.
I don't have to make anydrastic decisions.
It's so much less stressful andthings that used to be
(15:36):
emergencies and crisis that'snot the case anymore, which is
huge.
Brad Nelson (15:42):
So here are some just real examples of small wins
, right?
Obviously, if you guys havebeen listening to the podcast,
you listen to our celebrationson every show.
But here are some ideas and,like Ryan specifically said, the
most important thing whenyou're focusing on your small
wins is don't poo poo on any win.
Just don't do it.
Don't say I only saved or Ionly was able to pay off this
(16:03):
much debt, all right, that ain'tgoing to work.
You have to flip your mindset toa more positive one.
Like I did get to pay off thismuch debt, all right.
I was successful in saving thismuch money, no matter what it
was.
But things like tracking yourspending for a week is a great
win.
You're going to learn a lotabout your spending habits.
Saving an extra 20 bucks fromyour grocery budget just like
(16:25):
Chris said you know at the endof his envelope it was the end
of the month.
He had money left over that's agreat win.
He could take that money, putit into his emergency fund or
pay off extra debt.
I mean, that's something youshould celebrate.
Making, obviously, one extradebt payment or making more of a
payment on your snowball listAwesome win, right?
Selling something you don't useto add to your emergency fund.
So looking around your house,getting stuff put on Facebook
(16:45):
marketplace focusing on incomeproducing activities All of
these things add up to big winslater.
Any that you guys want to addthat you can remember from very
early on that felt great.
Chris Hawkins (16:58):
Well, it's even things like just getting better
at budgeting or just hey, I didanother budget.
You know, changing how I didthings, how I budget now and how
I budgeted when I first gotstarted are completely different
.
But had I done the budgetingthe way I do it now, then it may
not have worked.
Does that make sense?
So you constantly learn andgrow.
I think it budgeting the way Ido it now, then it may not have
worked.
Does that make sense?
So you constantly learn andgrow?
(17:21):
I think is the big thing andjust one small change to how you
budget and going yeah, thatworked, that's going to pay off
in the long run.
So sometimes it's the littlethings that are the mental part,
not just the numbers.
Kati Hatfield (17:35):
I remember my small wins were not going to
target.
That was a big win for me,because going to target meant
spending a lot of money that Ididn't need to spend, and not
going to target was a win.
Brad Nelson (17:49):
So one other point I do want to bring up, too, is
that when you're focusing onsmall wins that you want to work
on, focus on something you canachieve as well, especially when
you're first getting started.
Focus on things that you knowyou could get that done.
Make it a little bit of astretch at the same time.
For instance, we tell peopleone of the first things that you
should do before you pay offany debt is to build an
(18:11):
emergency fund.
We suggest $1,000 to $3,000.
And we tell our roots memberswe want you to get it done in
the first 30 to 60 days.
And for some people that freaksthem out a little bit, because
it's like Brad, I can't evensave 50 bucks.
Like you want me to get athousand to $3,000 in the next
30 to 60 days.
I'm never going to be able todo that.
The point of the deadline is tocreate urgency, right.
(18:32):
So we want to stretch you alittle bit, we want to get you a
little bit out of your comfortzone, but at the same time, we
also want to make sure that it'ssomething that you can achieve,
because once you achieve it, itfeels really freaking good when
you make that happen.
So make sure whatever youdecide to pick like if it is
tracking your expenses for weeks, saving a certain amount of
money, maybe it's paying off asmall credit card, maybe it's
paying cash for a purchase, Idon't care what it is Just make
(19:01):
sure that you pick somethingthat you can achieve and put a
deadline to it so it createssome urgency, because without
urgency, you're not going to bereally willing to take any
action right, and without actionyou ain't going to get any
results.
So focus on what you canachieve and again track all of
those small wins, becausethey're going to add up over
time.
All right, guys, if you're readyto break free from living
paycheck to paycheck, you wantto reduce financial stress,
build savings and finally payoff debt for good.
But again, maybe you're notsure where to start.
(19:21):
Don't worry, we've got youcovered.
Simplify my Money is sent toyou each and every Sunday to
your email.
It is your step-by-step roadmapto better financial control.
You're also going to learneasy-to-follow strategies to
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and you're going to gain thetools and confidence to tackle
(19:43):
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You can sign up for Simplify myMoney by good things all the
bad things that may be.
Chris Hawkins (19:52):
Let's talk about death.
Let's talk about death.
Tune into a death-free death.
Brad Nelson (20:12):
Tune into a death-free death.
All right, that's all meansit's time for the celebrations
of the show, and we're kickingoff with Nick.
This is a great win for today'stopic.
Made it through the week usingonly envelope system, just like
you, Chris, Everything was paidin cash.
He says incredible feeling.
And Nick man, they've beentaking some serious action over
(20:33):
the last few months sincegetting started Just having some
awesome, awesome wins.
So great job, Nick.
Chris Hawkins (20:39):
And Tara says that she was finally able to
work some overtime to make a fewextra dollars and this will
become a regular thing nowbecause she needs to tackle that
last debt, which is her car.
Brad Nelson (20:52):
Yeah, awesome Way to go Tara.
Kati Hatfield (20:53):
And Mary has put $160 in her sinking funds, $90
to her health account, $50 forChristmas fund Way to plan ahead
, mary and $640 to more debtPlus.
She has the cash available tosend her daughter off to stay
with her cousins.
Brad Nelson (21:12):
Yeah, and I love this win because she takes her
time and focuses on everythingthat she got done that week and
it's awesome.
Ryan Nelson (21:20):
This is just an awesome win list, great job and,
Suzanne, I was looking over ourelectric bill and found new
rate options on the companywebsite.
We can now switch to a flatrate option.
That will save us about 85 to$100 a year.
Brad Nelson (21:32):
Yeah that's awesome , suzanne.
And then I got one more pagepage says she worked overtime
the last few weeks to make upfor not having any dog sitting
jobs this month.
So again focusing on thoseincome producing activities Love
, love, those wins.
And, as always, guys,congratulations to all of you
guys who are taking a stand foryour financial life and you're
wanting better.
Hey, we get that.
Getting out of debt.
It's not easy, but with ourhelp and with your consistency
(21:55):
and discipline, we promise youguys, this will be some of the
best work that you guys do inyour entire life.
Thanks for joining us ontoday's show and we will see you
guys on the next episode.
Announcer (22:09):
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Visit debtfreedadcom.
(22:33):
Catch you next week.
Have you ever felt like fixing your finances is
this huge, overwhelming mountainyou'll never be able to climb?
Like no matter how hard you try, it's never enough to feel like
you're really getting ahead.
Here's the truth Big changesstart with small wins.
So in today's episode, we'regonna be talking about why those
tiny steps and tiny wins matterso much and how they're the key
(00:21):
to feeling better about yourmoney right now.
Not someday, but today.
Whether you're trying to savemore, pay off debt or just stop
feeling stuck, this episode isgonna help you see how small
wins can add up to big results.
Announcer (00:37):
You're listening to the Debt-Free Dad Podcast with
Brad Nelson.
Brad and his co-hostsexperience the anxiety of living
paycheck to paycheck beforelearning the fundamentals of
financial success.
They are now on a mission toempower regular people to pay
off their debt for good andenjoy happier, less stressful
lives.
Keep listening forinspirational interviews, tips,
(00:59):
tricks and practical advice togain financial freedom.
Brad Nelson (01:05):
Hey guys, welcome to today's show.
My name is Brad Nelson.
I'm the founder of Debt FreeDad.
I paid off about $45,000 ofdebt and I've been debt free now
for more than 12 years.
I've also helped thousands ofother people save and pay off
tens of millions of dollars withthe work that we do here at
Debt Free Dad.
Chris Hawkins (01:20):
And my name is Chris Hawkins, and my wife and I
began our journey back in 2005.
We're coming up on almost 20years of doing this, and we have
been debt-free since 2008.
Kati Hatfield (01:32):
And I'm Katie Hatfield and I am still paying
off my debt and getting to debtfreedom and in the last seven
years, on a single income, Ihave paid off $222,604 in debt
and saved so much more.
Ryan Nelson (01:50):
And my name is Ryan Nelson.
My wife and I paid off $160,000over eight years while we were
raising three kids.
Brad Nelson (01:56):
So after listening to this episode, if you are
ready to take things to the nextlevel.
You want to break free fromliving paycheck to paycheck, you
want to reduce financial stress, you want to build savings and
finally pay off your debt forgood, but maybe you're not sure
where to start.
We've created some incrediblefree resources here at Debt-Free
Dad to help you get there, andwe'll be sharing some details
about those later on in today'sepisode.
So, guys, today I love thistopic.
(02:18):
Probably one of my most favoritethings to talk about when it
comes to finances is the powerof small wins and one of my
favorite books I shouldn't sayit is my favorite book.
I've read it tons of times,I've listened to the audio tons
of times, and it's called theCompound Effect by Darren Hardy,
and it's not a very long book,but it literally you can take
(02:41):
this thing and apply it toeverything in your life.
And the whole book, the wholething, is about this idea of the
power of small wins.
And one of the quotes thatDarren Hardy has and I wanted to
share this here as we kick offthe episode he says it's not the
big things that add up in theend, it's the hundreds,
thousands or millions of littlethings that separate the
(03:02):
ordinary from the extraordinary.
That's just so true, and I thinkthat's one of the things that
keeps a lot of people fromgetting started is that they
sometimes will sit back, and Iknow I did this.
You look at the mountain youhave to climb right and you look
at this huge thing and it'slike how am I ever going to do
that?
It feels so intimidating and itmakes you just feel stuck and
(03:26):
you don't even want to do itright?
So what a lot of us do and youguys can probably talk about
this, you know, we stick ourheads in the sand and we just
ignore it We'll figure that outlater because it's just this
huge monster that you don't evenwant to deal with.
Ryan Nelson (03:38):
I know we're talking about small wins today,
but when you look at your debt,especially when you first add
everything up and you just get avisual of where you're at and
it's super scary and you're like, oh my gosh, I'm never going to
get out of this.
I think sometimes what weforget, just like small wins add
up, those small little mistakesthat you've been doing over the
past 20 years, 30 years, thosealso add up.
(04:00):
And it's the same concept.
We don't think of the $5 here,the $10 here, the $50 a month
here.
None of that matters untilwe're in this position where now
it's like, oh my gosh, we'vegot this huge pile of debt and
we're never going to get out.
And the way you're going to getout is the same way you got in
it's just by small wins.
Except we're going to just doit in reverse Instead of making
small bad decisions, we're goingto make small good decisions,
(04:21):
and we're going to just keepdoing that over and over and
over again.
Chris Hawkins (04:25):
Yeah, one of my favorite quotes from Ben
Franklin is small leaks sinkgreat ships, so it doesn't have
to be something big, it's alwaysthe little little things or
death by a thousand cuts.
And so, yeah, the opposite ofthat, obviously, is how you get
out of debt.
It's the little things that putyou there.
It's the little things that aregoing to get you out.
I do want to reiterate, ifyou're listening to this podcast
, the Compound Effect is alsoone of my favorite books.
(04:47):
I give it to people as giftsall the time and it mentions and
they're the same thing thatRyan just talked about is you
are the culmination of all thelittle decisions that you've
made.
Okay, and most of thosedecisions are small, they're not
big ones, so they challenge you.
In the book he does if youremember this, brad to identify
the two or three things that putyou in that position and then
(05:08):
what are two or three positivethings that you can do to get
out of that?
And this is a simple book onstop doing these three things
and start doing these threethings and do them consistently
over a long period of time, andyou will undo all the bad things
that you've done, sometimes ata much quicker timeframe than
you did when you got there.
So I'm a big fan of the smallwins.
(05:29):
That's exactly how you're goingto get out of debt.
That's exactly how you're goingto build wealth, and it makes
it fun when you can.
You know $10 here, $20 there.
It seems like it's a smallnumber but it's like, yes,
there's another $10 to puttowards that debt.
There's another $15.
Or I decided to eat at hometonight instead of eating out
(05:50):
and save that $15, $20.
It was $15 back when we weretrying to get out of debt.
Now it's probably more like $40to go out and eat for two
people.
But you get the point.
Small things.
But go get the book theCompound Effect, order it on
Amazon.
Go to Barnes Noble localbookstore, get it.
And when he tells you to dosome exercises, to do some
(06:11):
thinking and write some stuffdown on paper, do it.
Yeah.
Kati Hatfield (06:15):
I would say I definitely would not have stuck
around for seven years and paidoff over $222,000 in debt if I
wasn't tracking all the littlewins along the way, because I
still look at that number and gohow?
How did that happen?
How have I been able to makethat much of an impact on
something that stressed me outfor 35 years?
(06:37):
So yeah, every little smallthing does add up quickly and
we've said on the show a numberof times in order to waste
$10,000 in a year, you only haveto spend about $28 a day at the
coffee and lunch and dinner atthe drive-thru.
(06:58):
Easily.
If you were finding $25 to putaway in savings, you could have
$10,000 saved in a year.
Brad Nelson (07:07):
I went to Jimmy John's today, by the way, $26
and some change for twosandwiches, a bag of chips and
two sodas.
I was like, oh my, I don't eatout that much.
So that's just like.
Oh my gosh.
And my son always makes fun ofme.
He's like is this the firsttime you've ever been out of the
house?
It's crazy, but it's true.
I think.
Why small wins?
I think the biggest reason whythey're so important is because
(07:29):
it builds confidence and itbuilds momentum, and so many
people, obviously, when they'restarting to get a debt, they're
starting to improve theirfinances.
We have none.
We have no confidence, we haveno momentum, because we're so
used to always playing defenseand getting our teeth kicked in
all the time.
Right, we're constantly hit bythis crisis or this bill or this
one, and it never feels likewe're actually able to really do
(07:49):
anything meaningful.
And when you're constantlygetting beat down all the time,
it just feels like you're notgetting anywhere.
So that's why doing one littlething, one win, just in focusing
on that, that's one of thereasons on this show, we have
the celebrations of the show atthe end.
That's the reason, you guys,because those small wins are
(08:10):
just so important.
And the other thing, too, is alot of people, because of these
small wins, because it starts tobuild confidence, because it
starts to build momentum, itstarts to become a little bit
more fun.
We've even had people saythey're addicted to now paying
off debt, like they cannot waitto pay off the next one.
Because it's this huge feeling,it's an awesome feeling that
they get to check something off,because psychologically, your
(08:32):
brain loves to see that progress, even if it's just a little bit
, and that's one of the reasonswhy I think, for instance, the
tool that we always teach is thedebt snowball.
I think that's why it's themost effective From a
psychological standpoint.
You're seeing progress, you'rechecking things off.
Like Chris, you mentionedbuilding wealth.
You don't build wealthovernight.
Most people don't inherit it,win the lottery or do anything
(08:54):
like that.
Most millionaires are self-madeand it's made by putting money
away every single month.
Not a huge chunk all the time,but putting away 10%, 15%, 20%
of their income, maybe more,depending on what their
situation is, and just puttingthat money away every single
month and when they first startthe compound interest that
they're building, it doesn'tlook like much.
(09:14):
In fact, you might even saythis isn't even worth it.
But if you look at it from 20,30, 40 years from now, it's at
the end where it starts toexplode.
And someone might say, well,they're an overnight success,
they're a self-made millionaire,but they don't see the years of
discipline that it took them.
All those little tiny wins thathappened basically summed up
this huge amount of wealth thatthey've now built.
(09:34):
And you hear these stories allthe time about these little old
ladies that pass away.
No one ever knew that they hadall of this money Millionaires
you never would have known it,but a lot of them again.
It just came from consistencyputting away money every single
month, stacking their small winsand eventually have this huge
win.
It's incredible.
Ryan Nelson (09:53):
People that do this , that share their small wins,
and a lot of times you'll see atthe beginning, when they first
start sharing I know it's not abig deal, but I was able to save
$50 this month and you'll lookat those people in 12 or 18 or
24 months and what started offas, oh, this isn't a big deal,
it just starts to snowball onitself and suddenly those people
are like I've paid off $20,000in debt and I've saved $5,000.
(10:16):
Because sometimes when youreduce to share those
celebrations, I think peoplelistening like, oh, they saved
100 bucks.
Wow, that doesn't seem like alot.
Well, it's consistently.
You keep doing that andsuddenly over 24, 36, 48 months
in Katie's case, seven years itadds up to $222,000.
So it's like, yeah, at thebeginning it might not seem like
(10:38):
a big deal, but you do itconsistently over a period of
time and boom, it adds up andyou start to capitalize on it
over and over again.
Kati Hatfield (10:44):
Right, I also love the snowball stickers that
are in the debt-free dad inRoots and the planner, because
stickers are fun and when yousee all those stickers on there
it's like gold star for me thisweek.
And little things add upbecause for about five years I
had been putting away just $50 amonth in a Roth IRA and I
(11:08):
stopped because I was gettingout of debt so I stopped
investing.
That account is now $17,000plus and I was like, oh wow, I
guess the compound effect doesreally add up over time.
And now that I am getting outof debt more and have decided I
also need to start reinvestingagain, it's just going to grow
(11:31):
that much because I still have,hopefully, 20 years left before
retirement and 20 years is agood period to get that compound
interest.
Chris Hawkins (11:42):
I definitely was one that gamified it big time.
I've talked about that on thispodcast.
I've even done a couple ofindividual podcasts on this
subject about gamifying yourdebt, because we all like to win
, we all like to play games, andhere's the cool thing is, you
can sort of set the game up theway that you want it.
So don't think of it as$100,000 worth of debt.
(12:04):
Maybe think of it as I've justgot to come up with a hundred
ways to come up with a thousanddollars.
If you can make the numberssmaller, they're much more
achievable.
Or I've got to come up with athousand ways to come up with a
hundred dollars and you go okay,I can come up with a hundred
dollars.
That's not that difficult, andthat's why, for me, I was always
(12:26):
so excited when my foodenvelope had money left over at
the end of the pay periodbecause that was more money to
go towards a debt, and so Itreated every dollar as if it
was a point in a game, and Ikeep doing that.
I still do that to this day,even though I have no debt.
It's just on the positive sidenow, and I am a testament that
(12:47):
small things, whether you'regetting out of debt or whether
you're building wealth.
You can do tremendous,tremendous things by just doing
it a little bit at a time.
Brad Nelson (12:57):
Yeah, chris, you brought up point system.
Katie, you brought up stickers.
I think this is where the valuereally comes from Not only
focusing on small wins, but alsotracking those small wins too.
And this is so important injust every area of your life,
like, for instance, in thisbusiness.
I mean, we've been working hardat trying to grow this business
and we're just at like thisstall point.
I'll tell you guys honestly,it's frustrating.
Ryan and I Amber, we're workingfull-time here on Debt Free Dad,
(13:20):
trying to get this thing to go.
We want more members.
We're pushing and pushing andsometimes you don't get the
results that you want to see andit gets frustrating.
We've had some hard days, right, and it's like getting out of
debt.
I look at it like getting outof debt.
It's not always going to goperfect, it's not.
You're going to have some harddays, you're going to have some
hard weeks.
You're going to have some hardmonths sometimes, and if you
(13:40):
don't have any proof of progresslike you haven't been tracking
your small wins if you don'thave something, like Katie said,
I can go back to my debtfreedom success path kit that
she got when she joined Roots,like with all of her debt
snowball stickers.
I'm just, I'm just in a toughspot right now, like things are
going to move in the directionthat we want them to.
It's unfortunately just nothappening in the time that I
(14:00):
want it to, right, and so itcould be easy, without any
tracking, to say I'm going tothrow in the towel, like we're
going to quit, we're going togive up because this isn't
working.
That's not necessarily true,right?
Maybe you just have to shiftyour mindset, maybe you have to
do something different, right?
Maybe you have to get drasticand make some bigger changes in
your life to get money moving,to free up cashflow, to start
(14:23):
making better progress, butwithout any proof of progress,
it's easy just to say this isn'tworking, I give up, but
meanwhile you have been makingprogress.
And this is where a lot ofpeople kind of get in the cycle
of this constant.
You know, fits and starts.
Right, they'll start, they'redoing good for a while,
something bad happens, they stop, then they get the energy to
start again and then they stopright, and it's just back and
(14:44):
forth and they never really makethe progress that they want
because they're not reallytracking their progress very
well.
Kati Hatfield (14:50):
And I would say when I started getting into
Roots, I didn't have any savings.
So getting that first $1,000 ina savings account was a huge,
huge success for me, because I'mlike wait, I've never had a
savings account like this.
This has a comma in it.
Come on guys, this doesn'thappen to me, and now I've been
putting away for seven years,$100 a month from my paycheck
(15:14):
Just automatically goes off intosavings, so I have more than
two months worth of income.
So if something did happen, I'mnot like, oh my gosh, I have to
run out and get a new jobimmediately.
I have a little bit of acushion.
I don't have to make anydrastic decisions.
It's so much less stressful andthings that used to be
(15:36):
emergencies and crisis that'snot the case anymore, which is
huge.
Brad Nelson (15:42):
So here are some just real examples of small wins
, right?
Obviously, if you guys havebeen listening to the podcast,
you listen to our celebrationson every show.
But here are some ideas and,like Ryan specifically said, the
most important thing whenyou're focusing on your small
wins is don't poo poo on any win.
Just don't do it.
Don't say I only saved or Ionly was able to pay off this
(16:03):
much debt, all right, that ain'tgoing to work.
You have to flip your mindset toa more positive one.
Like I did get to pay off thismuch debt, all right.
I was successful in saving thismuch money, no matter what it
was.
But things like tracking yourspending for a week is a great
win.
You're going to learn a lotabout your spending habits.
Saving an extra 20 bucks fromyour grocery budget just like
(16:25):
Chris said you know at the endof his envelope it was the end
of the month.
He had money left over that's agreat win.
He could take that money, putit into his emergency fund or
pay off extra debt.
I mean, that's something youshould celebrate.
Making, obviously, one extradebt payment or making more of a
payment on your snowball listAwesome win, right?
Selling something you don't useto add to your emergency fund.
So looking around your house,getting stuff put on Facebook
(16:45):
marketplace focusing on incomeproducing activities All of
these things add up to big winslater.
Any that you guys want to addthat you can remember from very
early on that felt great.
Chris Hawkins (16:58):
Well, it's even things like just getting better
at budgeting or just hey, I didanother budget.
You know, changing how I didthings, how I budget now and how
I budgeted when I first gotstarted are completely different
.
But had I done the budgetingthe way I do it now, then it may
not have worked.
Does that make sense?
So you constantly learn andgrow.
I think it budgeting the way Ido it now, then it may not have
worked.
Does that make sense?
So you constantly learn andgrow?
(17:21):
I think is the big thing andjust one small change to how you
budget and going yeah, thatworked, that's going to pay off
in the long run.
So sometimes it's the littlethings that are the mental part,
not just the numbers.
Kati Hatfield (17:35):
I remember my small wins were not going to
target.
That was a big win for me,because going to target meant
spending a lot of money that Ididn't need to spend, and not
going to target was a win.
Brad Nelson (17:49):
So one other point I do want to bring up, too, is
that when you're focusing onsmall wins that you want to work
on, focus on something you canachieve as well, especially when
you're first getting started.
Focus on things that you knowyou could get that done.
Make it a little bit of astretch at the same time.
For instance, we tell peopleone of the first things that you
should do before you pay offany debt is to build an
(18:11):
emergency fund.
We suggest $1,000 to $3,000.
And we tell our roots memberswe want you to get it done in
the first 30 to 60 days.
And for some people that freaksthem out a little bit, because
it's like Brad, I can't evensave 50 bucks.
Like you want me to get athousand to $3,000 in the next
30 to 60 days.
I'm never going to be able todo that.
The point of the deadline is tocreate urgency, right.
(18:32):
So we want to stretch you alittle bit, we want to get you a
little bit out of your comfortzone, but at the same time, we
also want to make sure that it'ssomething that you can achieve,
because once you achieve it, itfeels really freaking good when
you make that happen.
So make sure whatever youdecide to pick like if it is
tracking your expenses for weeks, saving a certain amount of
money, maybe it's paying off asmall credit card, maybe it's
paying cash for a purchase, Idon't care what it is Just make
(19:01):
sure that you pick somethingthat you can achieve and put a
deadline to it so it createssome urgency, because without
urgency, you're not going to bereally willing to take any
action right, and without actionyou ain't going to get any
results.
So focus on what you canachieve and again track all of
those small wins, becausethey're going to add up over
time.
All right, guys, if you're readyto break free from living
paycheck to paycheck, you wantto reduce financial stress,
build savings and finally payoff debt for good.
But again, maybe you're notsure where to start.
(19:21):
Don't worry, we've got youcovered.
Simplify my Money is sent toyou each and every Sunday to
your email.
It is your step-by-step roadmapto better financial control.
You're also going to learneasy-to-follow strategies to
manage your money moreeffectively stress-free money
decisions that are going to helpyou simplify your financial
life with proven tips thatactually work for normal people,
and you're going to gain thetools and confidence to tackle
(19:43):
your financial goals head-on.
You can sign up for Simplify myMoney by good things all the
bad things that may be.
Chris Hawkins (19:52):
Let's talk about death.
Let's talk about death.
Tune into a death-free death.
Brad Nelson (20:12):
Tune into a death-free death.
All right, that's all meansit's time for the celebrations
of the show, and we're kickingoff with Nick.
This is a great win for today'stopic.
Made it through the week usingonly envelope system, just like
you, Chris, Everything was paidin cash.
He says incredible feeling.
And Nick man, they've beentaking some serious action over
(20:33):
the last few months sincegetting started Just having some
awesome, awesome wins.
So great job, Nick.
Chris Hawkins (20:39):
And Tara says that she was finally able to
work some overtime to make a fewextra dollars and this will
become a regular thing nowbecause she needs to tackle that
last debt, which is her car.
Brad Nelson (20:52):
Yeah, awesome Way to go Tara.
Kati Hatfield (20:53):
And Mary has put $160 in her sinking funds, $90
to her health account, $50 forChristmas fund Way to plan ahead
, mary and $640 to more debtPlus.
She has the cash available tosend her daughter off to stay
with her cousins.
Brad Nelson (21:12):
Yeah, and I love this win because she takes her
time and focuses on everythingthat she got done that week and
it's awesome.
Ryan Nelson (21:20):
This is just an awesome win list, great job and,
Suzanne, I was looking over ourelectric bill and found new
rate options on the companywebsite.
We can now switch to a flatrate option.
That will save us about 85 to$100 a year.
Brad Nelson (21:32):
Yeah that's awesome , suzanne.
And then I got one more pagepage says she worked overtime
the last few weeks to make upfor not having any dog sitting
jobs this month.
So again focusing on thoseincome producing activities Love
, love, those wins.
And, as always, guys,congratulations to all of you
guys who are taking a stand foryour financial life and you're
wanting better.
Hey, we get that.
Getting out of debt.
It's not easy, but with ourhelp and with your consistency
(21:55):
and discipline, we promise youguys, this will be some of the
best work that you guys do inyour entire life.
Thanks for joining us ontoday's show and we will see you
guys on the next episode.
Announcer (22:09):
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(22:33):
Catch you next week.
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