I was talking to a good friend the other day and he mentioned that he had just picked up a copy of one of my favorite books, Getting Things Done: The Art of Stress-Free Productivity. I read the book a few years ago and I really enjoyed it.
The book suggests using a system of 43 folders – 31 folders for each day of the month and 12 folders for each month of the year – to help better organize the reader’s thoughts, priorities and responsibilities. (Merlin Mann, a proponent of the GTD process, has an excellent website, named, appropriately, 43folders.)
I mention the book, because I find that one of the root causes of poor money management is poor time management. Whenever I meet someone who is struggling with their finances, almost universally, they are also struggling to to organize their time. As someone who used to struggle with both money management and time management, I thought it might be helpful to share a few of my own thoughts on both subjects, and how they relate to one another.
Two Budgets –
I have two budgets, one for my finances and one for my time. I use the GTD 43 folders system to budget my time and the You Need A Budget system to budget my money. My plans, responsibilities, goals, appointments, bills, and expenses are all written down, on paper, at the beginning of each planning session, and I am able to create structure from what would otherwise be a chaotic mess. I have three kids, a wife, a full-time job, and I manage, edit, and publish this website, my podcast, the NCN Network, and No. Calories Needed. I cannot imagine trying to live my life without my two budgets.
When my mind is filled with worries about appointments or deadlines or financial obligations, it is not free to think about things that really matter – like my family members or my friends. So, in order to focus on the important people in my life, I jealously guard my planning time. I block off a period of time, at the end of each month, to plan for the next month. I also block of a smaller period of time, at the end of each day, to plan for the next day.
Road Map –
I have a spreadsheet with a list of annual bills, taxes, expenses, and due dates – for items such as automobile insurance premiums, life insurance premiums, car tag fees, renter’s insurance premiums, etc. I also have a list of my monthly bills and their due dates. Each month, I use them to help create my monthly financial budget. Instead of relying on my memory, I rely on my written down lists. Using these lists, I am able to take much of the guesswork out of my financial planning. I know when my bills are due and I don’t have to worry about forgetting an important fee or tax. I also have a list of contribution deadlines for my various retirement and education savings accounts.
At the end of each month, I sit down to work out both of my budgets. I grab my list of annual expenses, my list of contribution deadlines, and my list of monthly expenses. I go through my 43 folders system and I plan my monthly activities. My financial budget almost writes itself, because it it based on the information from the lists and in the folders. This system allows me to spend just a small amount of time planning my month, and a large amount of time actually living my life.
Have you struggled to manage your time? Has this affected your ability to manage your finances? Do you have tips or techniques that you can share? Leave a comment and let us know how you are improving your time management and money management skill.