Money & Parkinson’s Law

Parkinson’s Law is one of the most important laws to understand when it comes to your long term financial future.

This law simply states that as your income increases so does your expenses, and helps to explain why so many people retire poor despite earning a good salary throughout their working life.

You can probably find evidence of this law in your own life. Today you are most likely earning many times more than what you were at your first job.

Yet despite this pay increase, there always seems to be a need to spend every penny you have to support your current lifestyle. No matter how much you make, it never seems to be enough.

Financial Independence Comes From Violating The Law

In order to become financially independent you must make a conscious effort to break Parkinson’s Law.

This is done by developing enough willpower to resist the urge to spend everything you earn and to save that money instead.

As long as you obey Parkinson’s Law, you will never become financially successful in life.

Increase Expenses Slower Than Increases In Income

One of the best ways to break Parkinson’s Law is to increase your expenses at a slower rate than your income, and then to save or invest the difference.

If you are able to separate your income and expenses in this way you will be able to increase your standard of living, yet still ensure your future remains a financially secure one.

So from this point forward be aware of Parkinson’s Law and make an effort to save a portion of any salary increase you receive, rather than falling into the habit of spending more just because you are making more.