Rx for a Bloated Budget

stethoscope and money

Kenia Perez works in the aerospace industry in California.

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.

What's bloating your budget?
Don't guess: Read one month's bank statement and report back.

Kenia Perez works in the aerospace industry in California.

This post was also featured on Amy Applebaum.