Falling Prey To Parkinson's Law

First articulated by Cyril Northcote Parkinson in the early part of the 20th Century, Parkinson’s Law states that "the demand upon a resource tends to expand to match the supply of the resource*." This concept has been applied to numerous areas of life, from politics to computer data, to point out the fact that the more we have of something, the more we tend to use. In financial terms, Parkinson’s Law can be summed up in 4 simple words, “Make more; spend more.”

One of the biggest mistakes that new & aspiring entrepreneurs make is not adequately investing in their businesses. Whether it’s a new business owner skimming a little too much of the profits for personal enjoyment, or an employee wasting a raise or Christmas bonus on upgrades to their material possessions, most of us have the tendency of falling prey to Parkinson’s law. In fact, studies show that through the availability of credit, American’s have in essence re-written Parkinson’s Law. We don’t only let our expenses rise proportionately with our income; we actually let them outpace us by spending an astounding 114% of what we actually earn!

Unfortunately this is another area of life where the church at large has followed right in step with the world, and its results are tragic. This fiscal unfitness that is so prevalent in our pews paralyzes us from taking action on our God-given visions and prevents us from starting or expanding our entrepreneurial efforts. The body of Christ must make a change, and it starts by breaking the law…

The key to success in your business and finances is to make a concerted effort to violate Parkinson’s Law. I tell my students all the time that there are only 2 ways to make room in your budget, and that is to make more or spend less. When you receive a raise or bonus, or your business has a good month, you have to resist the temptation of allowing your expenses to expand, filling up this new found room in your budget. This extra money is in fact a seed, that when sown into a God-directed financial endeavor, can produce a harvest of prosperity and blessing for you and your family.

Take a few minutes and check out this short clip from a recent financial conference at which I shared a few more insights about the phenomenon you now know as Parkinson’s Law. Have a Blessed Week!



* Wikipedia, The Free Encyclopedia, www.wikipedia.com, accessed 10/22/2008