Now…I Think I’m A Lot Better with My Finance.
My First Encounter with Parkinson’s Law.
When it boils down to personal finance, here’s one truth I tell myself;
NO MATTER HOW HIGH YOUR INCOME IS, YOU’LL NEVER ADMIT ITS SUFFICIENCY.
1. My needs are ever increasing, and subject to change.
2. There’s always a desire for more.
2–3 years ago, I was desperate to learn about personal finance. I’ve never been a wasteful person, but the higher the income, the faster it gets exhausted. And guess what…the expenses were never on food or clothing, I couldn’t explain it.
Then I found this law;
Parkinson’s Law in relation to finance states that “your expenses will always rise to your income”.
At first it appeared to be stupid, but after continuous meditation, it made more sense to me.
Imagine the number of times you’ve said ‘only if I was earning a bit higher’, and after getting that little increase, you were still complaining about its insufficiency.
Here’s the trick: the moment you experience an increase in income, unconsciously your needs and wants are affected.
Let’s say I experience an income shift from $1,000/m to $10,000/m. My first need would be a car (if I don’t have one at that moment.), for the sake of mobility. I might have promptings to allow my lifestyle reflect my earnings. However, that’s where the role of discipline emerges. I’ll have to discipline myself if I’m to maximize my income.
Your Ability to cut down irrelevant expenses, will increase savings and investment opportunities, and discipline is key.
This also applies to other aspects of your finance.
You should consider these;
1. Develop a powerful savings and investment culture, and I’m talking about percentage (%) based.
2. Have other sources of income to help you increase your income.
I would suggest you pay more attention to the first, ‘cos without a strong ‘savings and investment’ culture, income generated from other sources will definitely follow the “drain” medium.
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