Your survival strategy: spend 25 per cent less

Tough times ahead.

Don’t lament what you’ve lost. Join the 25 per cent club instead. It’s difficult isn’t it? If you’re not losing money by being wasteful and irresponsible, you’re losing it because you’re a goody two shoes and squirrelling it away in a structured product for your future self – with fees and other costs eating away at performance.

It’s enough to make you weep. Problem is, the ride is going to get worse. Because not only do we have to contend with our own behavioural issues; spender-broke or saver-where’s-mymoney-gone? No, we also have a world order that’s sucking us all into a sinkhole.

The IMF finally totalled up global debt, last month – what took them so long? They put it at twice the size of the world’s economy and growing. It’s over US$152 trillion, if you’re interested.

So what you might think – just another bunch of numbers and sound bite-elicious statements that don’t mean much to me.

The mere mortal takeaway is this: we’re in for more financial turmoil.

Regardless of who is hurting – be it governments or the private sector, we, the people, will pay the price. So what can we do about it?

Well I’m here to say that we should be paying very close attention to what those major entities – corporations and governments – are doing to survive this phase – and do the same.

One thing they’re all doing is trimming back cost. One method in particular has my attention: I was at a mega-meeting held by a multinational a few weeks ago. When they were done with information drill- down and highbrow charts, there was a step back from detail that neatly simplified and encapsulated everything with a universal call to action to cut 25 per cent of everything they did, including: money spent – on everything; travel time; meeting durations – you get the idea.

So how about it: 25 per cent. It’s a sizeable chunk – not so big that it will disable you if you’re living within your means, but big enough to make a significant difference to your life.

I’m calling it “the 25 per cent club” to get you to think more positively.

To cajole you into joining and taking action, think this: if a major global firm has done its number- crunching, trend analysis and future projections – based on current customer activity, payment behaviour and future commitments ( again this is extrapolated from government and the private sector needs, cash flow and commitments) – and have concluded that for them to survive the present and be prepared for the future they have to cut 25 per cent off everything, you should be snapping to attention – and doing the same.

It’s not all about cutting money that is spent. Just think: if you had 25 per cent more time to spend with people who are important to you; 25 per cent more time to spend finishing your work instead of the drone of yet another meeting that has outlived its usefulness. And yes, 25 per cent more savings.

With this in mind, make a cup of your favourite beverage, sit down, pen in hand, and list five things you can put into your 25 per cent pot. Then choose three that you’ll stick to. My suggestions are:

25 per cent less outgoings . This includes the food shopping, entertainment, anything that involves you spending money on “stuff”.

25 per cent more time with the lovely people in your life.

25 per cent less time on social media. 25 per cent more time reading. OK, so the less radical version of this is to take my first one – that encompasses all money out – and break it down into separate entries.

This is assuming you track your spending or how you use your time. A few months from now, sit down again – it’ll be easy with all that extra time you’ve carved out – to figure out what to do with the extra 25 per cent savings you are accumulating.

I’ll tell you something – no one knows what’s going to happen with the world’s economy.

But as long as your own personal economy is in the black, you’ll be able to weather anything it throws at you.

As for your extra 25 per cent, it might be an idea to sleep on it and see what opportunities come your way when things calm down.

‘ To survive the present and be prepared for the future you have to cut 25 per cent off everything