I close each day by deciding what important needs to be completed the following day. Usually I’ll have three or so tasks I have to get done no matter what. I’m not finished working for the day, until I complete this work.
Next to each task, I write how much time to allocate towards its completion. When it’s time to start working on that task, I set a timer using e.ggtimer.com with this time.
For example, my most important task for today was to write a blog post. I allocated 100 minutes to this task.
This morning before doing anything else, I first headed to e.ggtimer.com and set the timer for 100 minutes. Next, I opened up my word doc and starting writing knowing that I needed to hit publish in 100 minutes.
I would say this one productivity tip I learned from the book The Ultimate Selling Machine has increased my productivity at least 25% and arguably a lot more.
Why has setting time limits to each task had a huge impact on productivity? The reason being, Parkinson’s Law.
Parkinson’s Law states that “work expands to fill the time available for its completion.”
Therefore, when a time limit is set, I’m telling my brain to stay focus on what’s necessary to accomplish a task.
Parkinson’s Law and Money
Parkinson’s Law can also be applied to money management.
Specifically, expenses expand to match the supply of your income. Meaning, naturally your expenses will increase as your income increases.
I see this a lot from those who just got their first paycheck out of school or those who just received a large increase in income.
Think of a college grad that was lucky enough to get a job paying $40,000 after school. Immediately, they go out and get an apartment. Since they are in the working world they need a new car, wardrobe, and a smart phone.
The reality is that their financial situation is in no better shape than before, and sometimes a lot worse.
Sufficiency, Beyond Sufficiency, and Optimal Income
Every time I’m about to receive an increase in income, I decide beforehand what’s the best allocation for that money. My goal is to not just let it slip out of my hands, without it enhancing the quality of my life.
For example, say my average basic expenses are $3,000 a month. If I was making $3,000, all that I could afford each month is basic food, shelter, clothing, transportation, and medical care for my family. I like to think of this $3,000 a month mark, as being sufficient enough to life a comfortable life.
Next, say I increased my income to $4,000 a month. Knowing that my basic needs are covered, my goal is to allocate this extra $1,000 as to have the highest impact on the quality of my life. Looking at my life’s goals, I decide that the best use of this money is to invest for early retirement.
Now, say I increase my income to $5,000 a month. I again need to ask myself, what’s the best use of this money? In other words, how can I best utilize $1,000 a month to enhance the quality of my life? Lets say, I take this extra $1,000 a month and put it all towards travel. I have my basic expenses met, I’m saving and investing for the future, there is no reason why I can’t put $1,000 away each month for travel.
I encourage you to do this exercise yourself. Start at where your basic needs are met. At each $1,000 increase in income, decide exactly what you would do with that money. The goal is to get to a dollar amount, where another $1,000 increase in income doesn’t enhance the quality of your life.
Personally, I kept on going up until I hit $10,000 a month. After $10,000 a month, another $1,000 a month in income, didn’t have a huge impact on my quality of life. Knowing this, I set my optimal income at $10,000 a month.
Try it out for yourself and share your results in the comments.
Photo by: Kekermsi