The 20% Rule
The 20% rule simply states that most tasks will take 20% longer than we think, and most things will cost 20% more than we think.
This is not a steadfast rule that applies in every situation, but it can be extremely useful in many parts of your life. It can help us to not over-promise on our time commitments or put unexpected stress on our budgets.
I am a bit OCD when it comes to planning my time, which makes this rule especially hard for me to implement. I love a perfectly blocked calendar more than most people!
We are on a time crunch, trying to squeeze in as much as we can between work, working out, family time, and our social lives. Not to mention trying to get 7-8 hours of sleep. Implementing this rule creates a buffer that in turn reduces the potential for burnout and helps us to avoid not being able to uphold our commitments to ourselves or others.
In practice, this rule would mean adding an extra 10 minutes in your calendar to what is supposed to be an hour-long call. Adding an extra 30 minutes to the 2-hour block you plan to dedicate to working on that big project. And perhaps most relatable, planning an extra 5 minutes into your 30-minute commute to work in case of an accident.
If you finish early, hooray! Now you have a few free minutes to catch up on some emails, read that article, or take a short walk and finally call back your parents.
In Arizona, state sales tax is 5.6%. When you factor in city and county sales tax, the average is about 8% total. Price inflation is about 3% per year, and it can vary year-to-year. That puts us at 11% on top of the listed price that your mind has anchored to.
Add in an extra 10% as a cushion and you can see how this 20% rule can come in handy when you are trying to plan for major expenses in the future.
This can be really effective when you are saving for something big like a vacation, car, or house down payment. It also helps to create a much-needed buffer for planning your retirement! The last thing we want is to save a bunch of money towards a goal, only to have to go into credit debt or have to work 3 more years because it cost 20% more than we thought it would.
Make it Happen
This all sounds simple in theory but can be very hard to implement. Like most things worth doing, it takes consistency to feel the long-term positive effects. I started using it immediately on my calendar, and slowly implemented it in my spending plan. Your future self with thank you for the upfront discomfort now!
By: Jeff Locke