Rx for a Bloated Budget
By Kenia Perez
Sent: Monday June 21, 2010
Kenia Perez works in the aerospace industry in California.
Time and money
Give yourself a week to do a task, it will take a week—but give yourself two days, and it will take two days.
This phenomenon is known as Parkinson’s Law, which states: “Work expands so as to fill the time available for its completion.”
The same is true of spending and money.
When budgets expand
The minute you get a raise or even some birthday money, enter Parkinson’s Law: Your spending expands to consume the additional cash.
Here are three ways to regain control over your cashflow:
Don't guess: Read one month's bank statement and report back.
This post was also featured on Amy Applebaum.
Kenia Perez works in the aerospace industry in California.Time and money
Give yourself a week to do a task, it will take a week—but give yourself two days, and it will take two days.
This phenomenon is known as Parkinson’s Law, which states: “Work expands so as to fill the time available for its completion.”
The same is true of spending and money.
When budgets expand
The minute you get a raise or even some birthday money, enter Parkinson’s Law: Your spending expands to consume the additional cash.
Here are three ways to regain control over your cashflow:
- Shrink your numbers: If you give yourself $500 to spend on groceries each month, you will. Lower that limit and you'll surprise yourself by spending less.
- Be skeptical about “needs”: If you get a $200 raise, don't justify spending it because you "neeeeed" a bigger car, new dishwasher.
- Keep percentages steady. I strive toward the 50/30/20 Budget (you may prefer the Save-to-Spend Budget plan). Because these budgets rely on percentages, as my earnings go up, my savings and spending also increase—but they remain in balance.
Don't guess: Read one month's bank statement and report back.
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Kenia Perez works in the aerospace industry in California. |
This post was also featured on Amy Applebaum.
