Parkinson’s Law and Living Outside of Your Means

Most of us from time to time wish we made more money. This is not a bad goal to have. We want to make more money to support our family, travel more, or save more for the future. Whatever the goal might be, there are laws at work which are keeping you from reaching these goals.  One of these laws is called Parkinson’s Law.

Parkinson’s Law

This is the law of filling a gap to equate the whole. For example, if you have two days to write a report, you will take those two days. If you have twelve hours to write the same report, you will have it done in those twelve hours. Essentially you are filling in the constraints you have been given.

Parkinson’s and Money

With relation to money, the growth of your income will change your expenses. Unfortunately, it is not an easy thing to spot and combat against. Often this growth is a gradual transition and will most likely happen as a result of baby steps. Most often these steps are driven by thoughts and emotions.

Thoughts

One of the first hurdles you will have to contend with is the changing of thought processes about more money on a monthly basis. Typically, the increase in excess cash tricks our mind into thinking we can take bigger risks, spend more money, or afford bigger things. This of course is a fallacy. Simply put, you should not increase your standard of living because you “think” you can afford it. Your standard of living is driven by your budget. If your budget adequately allows you additional luxuries without additional strain, it can be appropriate.

Emotions

There is a significant relation between money and emotions. The feeling of having money provides comfort. However, in some contexts, having money provides pride through the outward display of having money. Regardless, there is a strong emotional factor attributable to money, especially when there is an abundance or increase. Thus, a strong “feeling” of  complacency or a “feeling” of pride to show others can quickly increase expenses. Buying products or services due to your “feelings” will never provide you the satisfaction you are looking for.

Fight Against Parkinson’s Law

The most effective way to combat the increase of expenses  with relation to your income is a budget. Your thoughts and your feelings contribute to your overall decisions of spending money. However, if you have a working budget which you are reviewing on a weekly or bi-weekly basis (according with paychecks), it should be very difficult for you to stray and spend more money than is needed. Your budget acts as your assistant or personal consultant. It will tell you exaclty what is going on with your finances and what you have the freedom to do. As long as you are not lying to it, such as manipulating the numbers, it will not lie to you.

Getting a new job, a raise, or paying off debt is an amazing thing! However, remember the goal of it all. You are striving to have a better financial life through these things and having more control. If you stray from this goal, you will be forever struggling for the same things, and will never reach them. Stay committed. Stay focused.