What is the quickest way to save money
You must know by now that saving money is an important skill to learn. No matter how much you earn, you will always wallow in debt if you don’t learn to save. So I will be telling you the quickest ways to save money by breaking Parkinson’s Law.
Of course, you must have a source of income before even thinking about saving as you cannot save that which you do not have. You should read up how to start selling online with little or no money and side hustle ideas for you in 2020.
What is Parkinson’s Law?
Parkinson’s Law was coined by an English writer C. Northcote Parkinson in 1955 and it has become popular ever since. The law states that work expands to occupy the time available to complete it.
The law makes sense no matter how you look at it. How many times have you spent more time completing a task than the duration you had in mind?
Or how many times have you left a project untouched until the last minute? That’s Parkinson’s Law.
You are probably wondering how this applies to your finances? Well, it does.
Let’s imagine your £1500 a month salary was raised to £3000. You then upgraded your lifestyle as a result of this bump in earning.
As a result, you moved into a better house, go on chilled vacations, buy fancy designer clothes and go clubbing more.
What you will notice is that your increase in earning coincides with an increase in your expenses. So at the end of the day, you are earning more but also spending more.
In fact, contrary to your intentions when you got the raise, you are not saving a penny more than you used to.
That is how Parkinson’s Law affects your finances. The more you have the more you’ll want to spend.
How then can you break Parkinson’s Law to improve your life and finances by saving more?
The first step towards a solution is identifying the problem. And thanks to Parkinson’s Law, this problem has been narrowed down.
The simplest way to beat Parkinson’s Law is to “set limits”.
- Set a limit for your spending
- Set duration for the time required to complete a task
Before I proceed, I want you to remember a quote as you embark on your savings journey;
“To save more you must live below your earnings.”
That’s confusing I know. You are probably wondering, why earn more when I can’t spend more?
Well, it’s not that you cannot and must not spend more if your earnings increase but be wary. You can easily get distracted by your increase in earning.
In fact, I would advise that you come up with a plan on how you want to spend that extra money. Check out this article on how to save more.
Set a limit for your spending
What Parkinson’s Law basically teaches is ‘DISCIPLINE’.
To save more, you must be prepared to break this law (and not the lesson). Sometimes you get tempted to spend above your means but it’s important to stay disciplined.
In fact, no one sums this lesson better than Brian Tracy, a motivational speaker and author. He said:
Parkinson’s Law says that expenditures will always rise to meet income. This means that the more you earn, the more you are likely to spend. Even if you can manage to double or triple your income, your expenses will eventually double or triple and end up no further ahead.
Financial success is gotten from breaking Parkinson’s law. You can only attain financial success when you your expenditures is not increasing at the same rate as your income.
Here is a rule that can guarantee you wealth over the course of your working lifetime: Save and invest 50 percent of any increment in salary or compensation for the rest of your career.
The remaining 50 percent of the increase can be spent in improving your standard of living. But make a pact today to save half of every increase for the rest of your career. Even with this discipline alone, you can achieve financial independence several years before your intended target.
Write down this simple five-word formula for financial success somewhere: Spend less than you earn. Spend less than you earn and then invest or save the balance. This formula can make you rich.
Another person that sums up how to effectively break Parkinson’s Law is David Bach. I would suggest you investigate his values-based finance system. He views money as a tool for realizing dreams rather than a means towards your retirement funding.
I want you to always remember this paragraph from Brian Tracy’s blog:
Parkinson’s Law explicitly explains the trap majority of us fall into. This is why many are in debt, have money worries and financial frustration. But when you develop sufficient willpower and resist the powerful urge to spend all that you make then you can begin to accumulate money and move ahead of the crowd.
One of the quickest ways to save more money is by breaking Parkinson’s Law. Breaking Parkinson’s Law will teach you discipline and that is its main lesson. Unlike most laws, this one is meant to be broken.
Are you ready to sacrifice to save more?