Have you ever heard the saying, it was a loose-change-decision? It refers to the things we can purchase with the loose change we have (or had, as the case maybe) in our pockets, wallets, or purses. Things like, a bottle of water, a cup of coffee, a soft drink, or a chocolate bar. It could be some change you give to a busker, to a child, or put into a piggy bank. I am not sure if you really understand the significance of these loose-change-decisions. It’s called the loose change effect.
Often loose-change-decisions are not overly considered and not truly valued as they should be. Why should they be valued? And it’s not just about money. They should be valued because the sum total of your life to this point, and what you will create moving forward is entirely due to the loose change effect in your life. That may seem like a big statement, and you may want me to justify that, so, I will.
Think about the loose-change-decisions you make on a regular basis. I live in Melbourne, Australia, considered by many (Melburnians anyway) as the coffee capital of the world. I don’t drink coffee, I have never had a cup of coffee, and I never will. However, many people do. In fact, some purchase multiple cups of coffee per day, for a few reasons. They like coffee, it is an addiction, they are craving a caffeine hit, and because it is a loose-change-decision. For about $6 in Melbourne, you can buy a high-quality cup of coffee. That is a loose-change-decision. In other words, it seems like an insignificant amount of money, particularly for someone who enjoys or needs coffee. Often, the same person who justifies buying three cups of coffee per day, and sees them as loose-change-decisions, complains he or she doesn’t have enough money for other things. Often important things.
So, let’s explore the loose change effect. Let’s say John believes he can’t survive getting through his workday without three good quality cups of coffee per day, Monday to Friday. He then enjoys two per day each day of the weekend. That works out at 19 cups of coffee per week. If a cup of coffee is $6, that is $114 per week, or just under $6000 per year. John also states that he can’t afford to take his partner away for weekends, to invest in high quality and healthy foods, or to get extra support for his children.
I am just talking about coffee here. What if John also buys 5 bottles of water per week at $5 per bottle? That’s another $25 per week. What if he buys a packet of chips or a chocolate bar from the donation box at work 5 days per week with his loose change. That’s another $25 per week. What if he fills up his car with petrol once per week and pays $2.20 per litre, when at the right time he could pay $1.70. If he puts 50 litres in his car each week, that is an additional $25 per week on fuel he doesn’t need to spend. We could go on and on here. All these are seemingly insignificant loose-change-decisions. John’s loose-change total is getting towards $200 per week and $10,000 per year. Trust me, that is not insignificant, it’s the loose change effect.
As I have mentioned, the loose change effect is not just about money. Every seemingly insignificant decision adds up, just like loose change. Health decisions, relationship decisions, business decisions, personal growth decisions, and just like loose change, over time, it will create an abundant surplus, or a gaping deficit. Which do you want? Surplus right? So, use the loose change effect to your advantage. What if John gave up just one cup of coffee per day, started eating a piece of fruit instead of chips or chocolates, and started buying petrol for $1.70 per litre? Not only would he significantly improve his health, he could also put an extra $5000 per year towards savings or things that are important.
My question to you is a simple but possibly confronting one. What loose-change-decisions could you start making today, in all areas, that will start building surplus in your life, rather than digging the hole of deficit? I will leave you to ponder that one. My podcast this week with Larissa Bartlett, is called The space between. In it we discuss the loose change effect of simple mindfulness practices to fill the space between stimulus and response. This is a conversation that will save and change lives.
I know there is not a lot of loose change around these days, as everything is moving towards cashless. That doesn’t mean that the loose change effect isn’t relevant and working in your life right now. In fact, in a time where convenience and quick-fix is king and queen, I believe it is more significant than ever. Pay attention to each and every decision you make and ensure that the loose change effect works in your favour.