Last week, we took a look at Parkinson’s Law, which states that “work expands so as to fill the time available for its completion.” So it makes perfect sense that last week’s post was all about time-saving techniques and maximizing your productivity.
But have you thought about how Parkinson’s Law applies to your money?
Maybe we could rewrite it like this: “Your lifestyle expenses increase so as to use up the income available.”
I’m talking here about the dreaded “lifestyle creep!” Here’s what I mean:
Let’s say you get a bump in your income. Maybe you get a juicy raise, land a sweet bonus, or start a profitable side business.
Then you upgrade your lifestyle! You spring for a nice vacation, move to a pricier home, start buying fancier clothes, or begin eating out more.
At the end of the day, that extra income has been completely consumed by the new expenses you’ve created for yourself. Your lifestyle expenses have increased and used up all of the available income you have.
So how can your understanding of this twist on Parkinson’s Law make you a money-saving whiz? [Read more…]