A big thank you to a young woman who booked a Money Discovery Call with me as she realised she was suffering from Parkinson’s Law. I wasn’t familiar with Parkinson’s Law and a quick search revealed this, dated 1955.
“It is a commonplace observation that work expands so as to fill the time available for its completion. Thus, an elderly lady of leisure can spend the entire day in writing and despatching a postcard to her niece at Bognor Regis. The total effort which would occupy a busy man for three minutes all told may in this fashion leave another person prostrate after a day of doubt, anxiety and toil”.
This young woman wasn’t worried that she was spending too much time sending postcards but that she was always spending to her means, and a bit more plus and she wanted to get some serious savings behind her to buy her own home.
Parkinson’s Law with money means that the more you earn, the more you spend and still don’t have any left over. It explains why so many get caught with tax bills long after the money has been spent and there never seems enough money to save or pay into a pension, when you don’t have an employer doing that for you.
After a decade of money coaching, I know this is a huge challenge. The more money we get, the more stuff we buy, the bigger the house, the bigger the liability.
So, if you feel you “should” be able to save money, where do you start?
Write down every penny you spend, initially for thirty days. Write down every coffee, really read your bills, check your statements. Question every purchase and payment you make.
This alone can be revolutionary, one client of mine calculated that she could save £17,000 a year from reducing living expenses, Amazon purchases made at the click of a button and always being the person who entertained, rather than sharing the burden with friends.
2. Start a financial freeze, stopping all non-essential expenses.
You can create a budget of your fixed, unavoidable costs per month and aim to limit your outgoings temporarily to these amounts. Aim to reduce your bills by 10% or more. There is so much help online now to save money. You can even make it a family game and all get involved!
3. Watch out for emotional spending.
I’ve noticed I’m spending more on food at the moment, just in case. That’s emotional spending, fuelled by Corona FEAR! I admit it but I know this so can catch myself and change the behaviour quickly.
Note. Accumulator Archetypes are emotional savers and have real trouble spending. It’s all about knowing your patterns, your money personality and understanding what’s hitting your spending buttons.
4. Find your Wedge!
Ensure your expenses increase at a slower rate than your earnings, and you save or invest the difference, then you will become financially independent in your working lifetime. Thanks to Bryan Tracey for this one.
He recommends what he calls the “wedge.” “If you can drive a wedge between your increasing earnings and the increasing costs of your lifestyle, and then save and invest the difference, you can continue to improve your lifestyle as you make more money. By consciously violating Parkinson’s Law, you will eventually become financially independent”.
5. Learn about YOU and MONEY, your personal relationship with money
This is the best investment in you and your business that you could ever make. I wish I had done this when I first started my business, not after fifteen years, the self knowledge would have been invaluable.
Money is about the most loaded, judgmental subject on the planet and we are all different. Without understanding our behaviour, we can get into a destructive cycle of, not only financial management challenges but also guilt, shame and blame which all affect our self-esteem and positive self-image.
Then we struggle to value ourselves and our services, have good money boundaries and to charge that we are worth
6. Take a Money Archetypes assessment
Either done online or as part of a Money Coaching course or Power Hour, £97 at present with me, will tell you so much and a session for your spouse or business partner could be the best investment you ever make!
I invited you to book a complimentary Money Discovery Call here. I’d love to help you start to create a happy, prosperous relationship with money. https://rosemarycunninghamcoaching.as.me