This blog is about how you handle money and about how money flows.
Let’s talk about Parkinson’s law. This law is extremely powerful. It’s always in play, whether you’re aware of it or not. It’s like gravity. You may be unaware of gravity and jump off the roof of a building. But you are going to be very aware by the time you hit the bottom. It’s going to work whether you’re aware of it or not. Gravity always functions.
Parkinson’s law always functions. It started out as the adage that work expands to fill the time available for its completion. Many of you have found this to be true. If you give somebody a task and say they’ve got five hours, it’s amazing, they get it done in five. If you told them three, they get it done in three. If you said, “It’s a six-hour job,” but we work from 8:00 to 5:00, seemingly, it always ends up taking till 5:00.
I was a mechanical contractor. I had to estimate work, and I was only paid on performance. But I had to estimate that work sometimes a year before that work was completed. It was interesting. My estimates weren’t coming in, and yet I was convinced that my numbers were proper. So, I learned Parkinson’s law through observation.
What I learned is that I could send a man out on a job for seven hours, but he worked daily from 8:00 to 5:00. So, on his time card, at the end of the day, there’d be eight hours on there, even though it was only seven hours of work. Not because he was stealing from me, not because he was immoral, or didn’t have character. It’s because of Parkinson’s law. It’s just the way it is. You know that you have to be done by 5:00, so you’ll get it done by 5:00.
Some of you do the same thing on the other side. By waiting until the last minute to do something and get it done, you create artificial stress. You’ll be pushing yourself so that you get something done in an amazing, short amount of time. I bet kids have done this with homework once or twice, right?
So, you get the idea, but I’m expanding this to say that expenses will expand to equal or exceed your income. What once was a luxury, once you’ve experienced it, will eventually become a necessity. You need to know this is working behind the scenes subconsciously in your life. Everyone has probably lived with less money at some point in time than they live with today. And some are under more stress on Friday or at the end of the month rather than on a Wednesday or the 1st of the month.
It does not matter how much money you make, unless you understand how it works, and you take control of it. We have clients that make $20,000 a year and have more savings than clients that make $400,000 a year. It’s possible. People with higher incomes, tend to have it coming in for so long that they get used to it. Next thing you know, if it stops or hiccups, they’re in just as bad of shape as somebody that’s making less than $50,000 a year. The vast majority of them have very little money at the end of the month and are under a lot of stress. They are in bondage and financial slavery for 20, 30 plus years.
They have no hope of getting off the financial hamster wheel when they are in debt for the next 30 years of their life. They can’t even slow down a little bit. Can’t get sick. Can’t have a layoff. Can’t have an economic turndown, or the house of cards collapses.