Parkinson's law.

Parkinson's law states that "work expands so as to fill time available for its completion." It was first coined by C. Northcote Parkinson in book Parkinson's Law: The Pursuit of Progress.

A common derivation of that is "expenses rise to meet your level of income." Has that happened to you? It happened to me in 1991 and I'm particularly aware that it could happen to me again in 2005.

In 1991 I took my BS in finance and started a carpet cleaning business...like most finance majors, of course! I learned business for a couple months and was earning a whopping $200-$300 per week working for someone else.

When I left that company and went out on my own, ad I used FLOODED me with business. I had 15 calls by 10:30AM day small ad first ran. The answering service told me every "little old lady in Saratoga was calling".

So almost immediately I went from making $200-$300 a week to making upwards of $1000 per week. WOW...23 years old and making that much money WORKING FOR MYSELF was great fun...had a great boss!

I don't remember what I spent all money on other than one of those nationwide pagers but my spending rose dramatically. But guess what? At $7.95 per room for carpet cleaning it doesn't take a math major to figure out I was working very hard to earn $1000 a week. So, of course I got tired and lazy and slowed down. My income level dropped to some level probably near $500 per week but my lifestyle didn't and you can figure out rest.

If, while earning $1000 per week I was living like I made $400-$500 per week I would have been sitting pretty... or whatever male equivalent of sitting pretty is! :>)

In this economy your best investment, best place to put your money is into paying off debts. Think of it as investing in your debt because that is exactly what you are doing.

If you put $1,000 into a bank savings account earning 2%, at end of a year you will have $1,020.

If you carry a $1,000 balance on a credit card with a 19% interest rate, and you pay minimum monthly payments, at end of one year you will have paid $190 in interest.

If you get $1,000 in a tax refund, small inheritance or from somewhere else you now have a choice to make. You can earn 20 bucks in a savings account or save $190 by paying off that credit card. Keep in mind that your 20 bucks is taxable income so you'll be left with $15 or so after taxes.