Time and money are very similar: they’re precious and it’s easy to think that somehow we’re always short on them. How often have you heard yourself say: “3pm already?! I don’t know where the time went!”; “I had €40 in my purse this morning and it’s gone! I have no idea where it went…”
Becoming aware of how you spend your time and your money, and the discrepancy between what you think you spend, and what you actually spend, is the first step on the road to better time and money management. So how do you cultivate better awareness?
1. Projections: Write down how much you think you spend
Does this sound familiar? Somehow there are always five or so items (perhaps more!) that are left undone on your to-do list.
Some have been there for a while and drop out after a time, others linger there for weeks until the last-day-before-holiday productivity rush.
And still, every day you wonder how come you didn’t get to these. On paper, your to-do list should have fit into your work day perfectly.
It’s the same thing with money. If you tot up how much you think you spend in a given month, you will list your rent or mortgage, an approximate amount for utility bills, for grocery bills, for petrol, and sundry expenses and direct debits depending on the habits of your household.
Just this exercise might make you realise that the total you come up with is bigger than your income – something will have to give, and still before you did that exercise you had no idea where that overdraft was coming from every month.
Or the total might be within the range of your income – but still you don’t seem to get ahead.
2. Log: Write down how much you actually spend.
An eye-opening time management exercise is to stop every fifteen minutes during the day to write down what you’re doing right.
Do this over a few days, and you might be in for a bit of a shock. You will see, black on white, where your time is going and where you were deceiving yourself.
For example you might think you don’t talk on the phone that much, until your log tells you you’re a bit of a chatterbox.
On the other hand, this illuminating exercise is the beginning of the road to better (time or money) management. You can only effectively change something if you work on the actual issue – not on an imagined issue that doesn’t exist.
In the example above, you might be trying to cut down on, say, lunch time (“I can’t afford a lunch break! I’m too busy!”), but you don’t realise you could get more leverage out of reducing time spent on the phone.
Instead of jeopardising your health and nutrition by skipping lunch, you would be much better off preparing for important conversations in advance so that you don’t ramble.
If you’re familiar with the GROW model of setting goals, this log exercise would be the “R” in the acronym: “realities”. If you’re not familiar with the model, I’ve written about it here
Very often we think “managing money” means cutting down on nice things. We talk about “tightening our belts” and “being good”, as if we were on a diet and needed to be disciplined.
But if you do the money log exercise you might realise that there are low-hanging fruits you can easily pick – without even needing to bid farewell to your “fun money”. Something like having your cake and eating it, too.
I find myself constantly making this point that making better use of your money enables you to dramatically increase your enjoyment of it – that’s certainly been my experience.
3. What is repeatedly tripping you up?
Say you want to manage your time better, because you’re constantly late to meetings and appointments and this is hurting your career: people resent having to wait for you and it doesn’t project a very professional image. So you vow to be more punctual.
And that’s when you realise that, for all those years, you were constantly being too optimistic about travel time, rush hour traffic and the like, if you remembered to factor it in at all…
Give yourself enough travel time, schedule it in your diary, and voilà, you are now the most punctual person that has ever graced the surface of the earth.
If it’s so simple, why do we keep making the same mistake? Perhaps because we wish travel time and rush hour traffic didn’t exist, because this is down time, unproductive time? Still, it’s a necessary evil – we can’t just wish it out of existence.
In your budget you might be well on track, being very good, saving money here, using it more efficiently there, opening a savings account and having money be transferred automatically. But somehow there’s always an unexpected expense: a gift, a wedding, a fine, the TV licence, the dentist.
Just because they’re irregular “one-offs” doesn’t mean they’re going away: factor them in.
Set aside an “unexpected expenses fund” every month, decide on an amount, and see how you’re faring. Make sure to record all those unexpected expenses as you go, so that you can adjust your monthly and yearly budget accordingly.
Personally, I do this all the time and I call them “lumpy expenses”. While this exercise hasn’t changed the amount of money that I have to pay, it eliminates the anxiety because I’ve planned for these in advance.
It also has the potential to save you money on late payment fees, credit card interest or the premium of paying over a number of months instead of in one lump sum.
If you’re too often unpleasantly surprised at how time or money can “slip through your fingers”, try these three tips and you might well discover a secret stash of these two precious commodities!
Susan Hayes Culleton, the Positive Economist, is Managing Director of international financial training company Hayes Culleton. She learned to manage her own money better when she was a student and then as a young businesswoman. She shares her tips and her journey in The Savvy Guide to Making More Money.
Photo Credit: Time is Money by Tax Credits via Flickr