The 5% Rule

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(or How to Pull an Aeroplane)

For over 30 years the World’s Strongest Man competition has featured a ‘vehicle pull’ event. In it, competitors are required to pull some outrageously heavy vehicle such as a train or plane using nothing but a rope, their hands and brute strength. To us mere mortals the task looks impossible. To the competitors though it’s just another challenge on their path to success – and they know that with the right mind set and technique it’s a challenge they’ll conquer. If you watch this vehicle pull event you’ll see that, for the competitor, most of his effort and energy goes into getting the vehicle moving from a standing start - because that’s by far the hardest part. At first, for all his struggling and straining, it seems that nothing is happening. The plane won’t move. Eventually though the plane starts to inch forward, bit by bit, slowly gathering pace and, as the vehicle gains momentum, the going gets much easier for the strongman (relatively speaking of course).

And so it is when you have the heavy weight of financial pressure holding you back. When the bills are piling up it can appear difficult, even impossible, to get on top of things, to get some momentum going. How do you even begin to get the 200-tonne plane to start inching forward? If you’re in the financial doldrums there are really only two realistic options and both of them are difficult to do – either try to earn more money or cut back on expenses. Cutting back is easiest but it also feels like something of a punishment - and most financial strugglers will claim that they have already cut back as far as they can go anyway. If you’re one of those people you should consider the 5% rule.

The 5% rule is very simple to do – so much so that you’ll hardly notice any difference in your daily life. In fact, you can even make something of a game of it. Here’s how it works: from today, make it your mission to look for anywhere and everywhere that you can cut back by just 5 percent - and by ‘look everywhere’, we mean ‘look everywhere!’.

Just about everything that you do in life costs you money in some way - watching T.V., talking on the phone, having a shower, driving your car, drinking a glass of water, even sleeping. There’s a hidden monetary cost to everything but, because we don’t pay-as-we-go, we tend to dismiss it. But these costs really do add up and so a saving of 5% here and there can also add up to more than just small change. And once you do start to make savings you’re going to leverage that money to create momentum. It sounds simple, right? But what does it mean in reality and can it really make a difference?

The first trick is to be aware of as many of the hidden costs that rob us daily. For example, how much does it cost to go to sleep at night? Most people would answer ‘nothing’, and they’d be wrong. For starters, there’s the heating/cooling of the bedroom. There’s also the cost of any batteries or electricity powering an alarm clock, fire alarm, burglar alarm, night light etc. There’s also the cost of wear and tear on the bed and the linen as well as the cleaning costs of washing the linen. There are the light bulbs that are used to read a book by or to get dressed or undressed by and the electricity cost to run them. There’s the cost of any night-clothes and washing those clothes. Maybe there’s bug spray to be used prior to sleeping. Perhaps there’s the cost of sleep medication and maybe there’s a glass of water or something by the bedside (even if the water is free, you still have to wash the glass). There might even be a smartphone or other device on charge while you sleep. Sleeping is far from free.

The point is that if you look closely enough, you’ll see that just about everything in life costs you money and when you realize this you can suddenly see lots of opportunities to cut back by just 5%. In the ‘sleeping’ case above, perhaps the room temperature could be taken down a notch. Perhaps energy-efficient (or lower wattage) light bulbs could be used. Perhaps rechargeable batteries could be used in the alarm clock or do without the clock altogether if you have a smart phone. Perhaps you could get into the habit of charging your phone during the day at work. Perhaps a shorter burst of bug spray could be used. Just 5% here, there and everywhere is all you’re looking for.

For many people, shaving just 5 percent off their electricity bill would amount to a tidy saving and there are many ways this can be accomplished. Some examples: completely unplug items at night time, hang washing up rather than use a dryer and turning down the thermostat by a degree or two are simple places to start. Just getting into the habit of turning off lights in the home when they’re not in use can also add up over time. Again, you’re only looking for 5% so start thinking about the hidden cost of leaving the T.V. plugged in at night, about taking that long shower, about leaving your computer on all night and so on.

What about your phone bills? Can you shave just 5 percent off? How about your cable TV bills? What about your Internet, your phone, your insurances, your credit card, your loans? When was the last time you called your providers and asked if they have any better (or more suitable) packages? Are there any other providers that offer a better deal? Are you perhaps paying for services that you don’t actually use or need? For example, with your phone operator, add-on items such as caller ID, call waiting etc. might attract extra charges. What about your insurance providers? Spend an hour on the phone to them when it’s renewal time and you could save yourself a small fortune. In fact, don’t even wait for renewal time. Look for any way that you can stretch the life span of products that you purchase by 5 percent. Look for 5 percent of savings here, there and everywhere. Five percent doesn’t sound like a lot but the cumulative effects can be quite considerable. For example, take a look at the liquid products in your home. Can you extend the life by just 5 percent by being less heavy-handed? For example, sauces, liquid soap, bathroom and kitchen cleaners, shampoo and conditioner, detergents etc. In most cases you’ll not even notice the difference, but you’ll extend the life value of that product by 5 percent. Would you really notice using 5% less shampoo in the shower? (For the record, the ‘rinse and repeat’ mantra was just a marketing gimmick to get consumers to spend more – and it worked beautifully.)

Can you save 5 percent on your fuel bill by driving more efficiently or cutting back on the mileage? For most people who drive, that would be a definitive ‘yes’. Make sure you remove items from your car that you carry around needlessly (sports equipment, bags, tools etc.). It costs you more in fuel to cart those items around in your car. When you are putting fuel in your car remember that fuel = weight and weight = increased fuel costs. Try filling your tank to only half-full. This means less weight in the car which means better fuel mileage. Can you throw out 5% less food perhaps? Can you cut back on your vices (smoking, drinking etc.) by just 5%? Can you downsize your portions by a paltry 5%?

5 percent is nothing. It’s negligible. You won’t even notice it, but it will start to make a difference. And once you’re using 5% less electricity, 5% less fuel, 5% less food and so on this will become your new ‘normal’. You can then go for another 5%. Gradually, you’ll start to see the savings trickle through. Like the World’s Strongest Man, you’ve now got that plane to inch forward and you’re now in the ‘momentum’ stage. This is when you can start to ‘pay it forward’ – that is you start to use the tiny little bit of extra money that you’ve saved to reduce your living costs further. For example, you might now be able to afford to purchase items in bulk when you see a special offer. Or perhaps you can now afford some low energy light bulbs which will help cut down your electricity costs. Or you can pay 5% more off on your credit cards each month which, in turn, lowers your monthly payment and saves you money in the long run. On and on it goes. Eventually you might even be in a position to start putting a little bit of money away each month and thereby earning a little bit of interest.

It’s not going to be easy and it might take you a while to get going and get some momentum, but the momentum will come if you stick with it. Just 5 percent might be all it takes.