Humans are incredibly adaptable creatures, especially when it comes to money. If we only have a little bit, we can make do and find ways to survive. The median household income in the United States is about $51,000. For those in the upper class, it is almost unimaginable to be able to live on that type of income. But it is being done by thousands of families all over the country, even if they may be living on the edge financially (paycheck to paycheck).
On the other end of the spectrum, you have athletes and celebrities who make millions upon millions of dollars and still manage to lose it all when the money stops rolling in. While most people won’t weep at someone who blew millions of dollars, they can have the same condition as a family living on median household income: putting themselves on the financial edge by living a paycheck to paycheck lifestyle.
Self Inflicted Wounds
So what does death by a thousand swipes have to do with anything? Death by a thousand cuts refers to a particularly gruesome form of capital punishment practiced in ancient China. The convicted criminal would be tied to a wooden stake and would have numerous small cuts inflicted upon them until they died. It was a form of torture/execution that was eventually banned.
Death by a thousand swipes then is when someone slowly and methodically destroys their finances by making many little purchases that add up to their financial demise. Making one or two purchases doesn’t result in anything serious, but they build up and can eventually kill your financial life.
(Tangent: With all this new financial technology coming out, what if there was an app that would shock a person every time they swiped their credit card? I think a cut for each swipe may be a little too much. But that would definitely keep people from overspending!)
While not as sadistic as the literal from of torture, death by a thousand swipes is equally deadly on your finances. And it can afflict everybody from the average family of four to the million dollar athlete (Vin Baker for instance). It can be something as simple as eating out way too much or having one too many Ferraris in the driveway.
Financial death by a thousand swipes has a pretty easy fix. It’s a 2 step process that sounds easy but takes discipline and some life hacking to pull off.
First step is to let the cuts you already have heal up. This means that you acknowledge that you made some possibly dumb purchases, but you’re not going to make them anymore. And you might have to trick yourself into doing this. If your major vice is grabbing coffee twice a day from the local coffee shop on your way to work, take a different route to work. Overspending is literally an addiction, and after a few days of withdrawal, you should be able to control it. Whatever it takes to keep you from making those unnecessary purchases and dying a slow and painful financial death.
After you wean yourself off of the mindless spending, the second step is easy. And that is to pay yourself first and always. Notice I didn’t say start a budget. I have nothing against starting a budget, but if you automatically skim 10% of your take home pay off the top and put it in a savings or money market account, budgeting doesn’t become a big deal. And since you hopefully ended your spending addiction in step 1, there is little chance you will spend more than you need to.
With these two steps, conquering the sources of your unnecessary spending and paying yourself off the top, you can dig yourself out of the paycheck to paycheck lifestyle in no time. This will open up opportunities to do things that can super charge your journey to financial independence such as paying off debt quickly or increasing your investment contributions.