Archive for October 29th, 2008

Your Money and Your Generosity 3

Continuing this series on generosity.  Today I look at what it would look like to live off less. And for this I refer to a post that a friend Brad Ruggles wrote about a month ago.  

 Give Yourself A Voluntary Pay Cut
This is probably the hardest principle for most people to live out. Many people in America are only a couple of paychecks away from losing their homes so how in the world do we live on less? Personal finance blogger No Credit Needed recently asked his readers:

What would happen if your boss came into your office tomorrow morning, and told you that your salary had been reduced by 15%? Furthermore, what if he told you that a new law had been passed and you couldn’t change jobs for one full year – and you couldn’t borrow any money, for any reason? What would you do?

Some people would have a very difficult time adjusting to a 15% (or other) decrease in pay, but the reality is most of us would find a way to get by. We would make adjustments, trim down on the extras and make it work. He asked this question to get people thinking about how much they spend vs. how much they really need to spend.

After we stop spending more than we make and learn to manage the money we already have in the bank better, the final step is to eliminate wasteful spending.

Make an agreement with your family that you’re going to take a voluntary pay cut in order to eliminate spending on things you don’t need so you can give more generously to things that matter.  You’ll be amazed at how little you can actually live off and find yourself carrying much less stress because of it.