Necessities

I've noticed that I've witnessed an amazing phenomenon many times in my life. Here is the story:

1. You find yourself having less money available (pay cut, job change, job loss, investment loss, increase in debt, etc.).
2. You make cuts in your spending to where you can just get by.
3. Something else happens that further limits your cash flow
4. You make cuts in your spending to where you can just get by.

Sound familiar? I've gone through it. I've seen a lot of friends go through it. Someone gets a 5% pay cut or their car dies so they finance another car, which drops their pay 2%. The words change but the tune is the same.

The really funny part is this, you were able to make small cuts to get back within your financial comfort zone each time. Somehow we each figure out a way to make ends meet.

Now the magical question: What if we put an artificial pressure on ourselves to do the same thing before there was an actual mini-crisis? What if we took 2% of our pay and, as Robert Kiyosaki says, paid ourselves first. Put it into savings or investment and do not touch it.

Imagine finding a way, somehow, to put aside an extra 1%, 2% or even 5% or 10%. Then figure out a way to live on what is left. Maybe start small, say 1%, and then increase it 1% every four months, six months or every year. You don't think that small amount will make much of a difference? Read The Slight Edge and see if you can say that it won't make much of a difference.