PARKINSON'S LAW OF FINANCE

Have u ever heard of Parkinson's Law of Finance? It states that expenses rise as to fill the available budget. In other word, it means that the amount you spent monthly rises according to your salary raise. The more you earn, the more you spend!

Story time again~~~~
Someone with RM5k salary monthly may want to take a loan to buy a RM80k Honda City, buying an IPhone4, brand new laptop, buying Padini clothes.

That someone may get a salary raise to RM10k monthly. Then he/she may want to take a loan to buy a RM160k Honda Accord, getting another IPhone, OSIM massage chair or weekly visit to masseur, frequent travelling, buying Miu Miu's or Prada's and taking a house loan for RM1million house in Mount Kiara.

So is that someone 'richer' when he/she is earning RM10k monthly? If 'rich' is defined as someone's net personal worth, I doubt that someone is better off when he/she is earning RM10k.

Does this someone sounds familiar to you? I think they are everywhere, including yourself!!

How to break from Parkinson's Law of Finance?

1. Be aware of . Next time you get your first pay or pay raise, be mindful of your temptation to spend more.

2. Be committed to save a portion of your salary. Lets say you wanna save 40% of your salary, when u earn RM5000, u save RM2000 monthly. If u earn RM10000, u save RM4000.

3. Pay yourself first. The next time u get your salary, the first thing you do is to put aside a portion of money for saving/investing. The remaining can be used for other expenses.

As for my own personal experience, my friend told me last year that once I started working as a doctor, my expense will increase dramatically. He said doctor is a professional job, therefore I must appear 'professional' in every aspects of my life. Or else my peers and the society will look down on me.

TOTALLY DISAGREE!!! Now, I have worked for almost half a year. I drove a 11-year old Proton Wira (bought with cash), using a brand new RM80 Samsung E1080, using a 2 year old Laptop and wearing clothes bought in pasar malam. Even most of my working shirts I got them second hand from my relatives. I have no plan to 'upgrade' any of those things. I don't feel degraded in anyway in front of my surgeons, friends or relatives. Haha maybe I don't have 'kiasu' gene in me, which I think is a good thing. I still can be a simple Ipoh boy. What's the big f***ing deal of being a doctor???

For those who looks down someone based on one's appearances, I have a picture for you: