I don't normally tell people to do this, but sometimes you have to break laws to get ahead in life.
You may have heard this adage. “Work expands so as to fill the time available for its completion.” It means, if you give yourself a week to complete a task, it will increase in complexity so that you’ll end up having to use the entire week in order to complete it, even if the task was simple to begin with.
This was an idea first proposed by Cyril Parkinson in a humorous satirical article meant to critique the lack of efficiency and the continual rising cost in the public service. Eventually the idea was revised and expanded to become famously known as 'Parkinson's Law' relating to productivity and time management in the workplace.
But Parkinson’s law doesn’t just apply to time management; it's applied to things you can easily relate to like space and storage: the more roads we build, the more cars there are; the more storage you have, the more things you fill it with (think shoes, handbags).
But for me, as a Personal Finance Mentor, the crucial derivative of Parkinson’s law is, that expenditure rises to meet income: your expense increases in lockstep with your earnings.
It seems normal that as you earn more, your needs increase and you end up spending more of that hard earned extra money. Parkinson Law says that, no matter how much money you earn, you tend to spend the entire amount and a little bit more besides (that's why you have those credit cards)
Today you might be earning several times what you were at your first job but somehow, you seem to need every single penny to maintain your current lifestyle? No matter how much you make, there never seems to be enough at the end of the week.
Therefore, in order to succeed financially, you need to break The Law. You need to break Parkinson’s Law when it comes to money.
Financial independence comes from violating Parkinson’s Law.
Violating Parkinson's Law is not like defying gravity, it can be done. You just need to develop the sufficient willpower to resist the urge to spend everything you make.
And unlike other laws, you won't go to gaol. Quite the opposite in fact. If you manage your expenses so that they increase at a rate slower than your earnings, and you save or invest the difference, you can become financially independent and go places you want to go sooner than you think.
Resolve to save and invest fifty per cent of any increase you receive in your earnings from any source and live on the rest and go places sooner still.
This strategy still leaves you the other fifty per cent to do with as you want.
When helping customers fight Parkinson's Law, I ask them to imagine they are facing an economic catastrophe, what expenses could they eliminate to get them through?
Wealth and Business Coach Brian Tracy does something similar:
...imagine that your financial life is like a failing company that you have taken over. Institute an immediate financial freeze. Halt all non-essential expenses. Draw up a budget of your fixed, unavoidable costs per month and resolve to limit your expenditures temporarily to these amounts. Carefully examine every expense. Question it as though you were analyzing someone else’s expenses. Look for ways to economize or cut back. Aim for a minimum of a 10 percent reduction in your living costs over the next three months.
Break Parkinson’s Law of money and radically improve your life. What limits are you going to start setting in order to break The Law and achieve financial freedom?
Leave a comment below or give me a call on 0402 684 199 to discuss.