Rx for a Bloated Budget

by DailyWorth

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:

  1. 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.
  2. Be skeptical about “needs”: If you get a $200 raise, don’t justify spending it because you “neeeeed” a bigger car, new dishwasher.
  3. 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.

DailyWorth is a free daily email about money management for women. We deliver practical tips on self-worth, net worth and everything in-between. Sign up and you’ll steadily master all aspects of money management from earning to saving to planning and investing—to become the financial powerhouse you always wanted to be.

Looking to grow your business and need support, check out Amy Applebaum’s Release Your Inner Millionairess Business Coaching Club

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Published on August 31st, 2010

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