Time is the most valuable resource we have, we all know that. We can use our time to enjoy experiences, build relationships with the important people in our lives, develop a skill which will pay dividends tomorrow or just spend quality time watching Netflix with our old friend, Mr Couch.
But our time is never 100% spent on doing what we love; unfortunately, there will always be some things in life that are important but not necessarily fun. It’s important you go to the dentist, have regular health checks, and pay your bills but if you’re like most people, you’d rather spend your time doing something else. Logically, it’s important to minimise the time spent on these activities while aiming to get the best possible outcome when you do. This means you won’t have to endure any more time doing these things than you need to. For most people, money management is one of those things that falls into the ‘important but not enjoyable’ category (it’s ok, I can take it).
Today we are more time poor than any time in human history. Young professionals in particular are working longer hours and have less leisure time than ever before. And because you’re paid more today than in the past, your time is worth more, so you don’t want to be wasting the precious little spare time you have stuck doing things you don’t enjoy. This impacts all areas of our life but has significant implications for money management.
The more time consuming it is to stick to a plan or strategy, the more likely you are to get off track so the more time we need to spend on managing our money, the less likely we are to stick to our strategy. Because you’re time poor and you don’t enjoy spending your time crunching numbers in spreadsheets or juggling money around your nine different bank accounts, you can either become frustrated or when a better offer for spending your time pops up, you take it (hello Game of Thrones reruns). You either give up or stop giving your money management the attention it needs to get the results you want.
I started working with a client a few years back that had felt the full force of this in action, let’s call her Charlie. Charlie was a successful young executive that had fallen into a bit of a debt cycle. When we met, she was super stressed. She had let one debt roll into another, and accumulated a few more on the way; it’s fair to say she had a few challenges with her money management. Yet Charlie was very effective in her job. She was smart, she was motivated, she was results driven. But for a reason she couldn’t clearly identify, Charlie couldn’t get the results she wanted on the financial side of her life.
I spent some time with Charlie talking through how she was currently running her money management strategy. We talked through what Charlie had done in the past to identify what had gone wrong. We spoke about the results that were most important for Charlie to achieve. I started noticing a trend; Charlie had self-sabotaged through a really common error.
Charlie was a great planner and had an epic to do list which she used religiously. She had put together a strategy to solve her money issues that looked great… on paper. But when I asked Charlie about the steps she took to implement the plan she had put together and how it actually worked in practice, the problem was revealed.
She started describing the steps involved. On payday, money came into account one, then she transferred a proportion to account two, which was used to pay for certain expenses, then she paid a separate amount to account three to pay down one of the debts, then she made another transfer to a different bank to clear her credit card, she then had to calculate what expenses were coming up and what amount was leftover, then review another two debts to establish how much of the leftover to pay to them, and manually pay them… Charlie kept talking and the list went on. I feel exhausted just thinking about it, let alone poor Charlie having to do this every pay!
Given the demands of her high-pressure job, she was often working to tight deadlines and critical issues would frequently come up that needed an immediate response. Charlie handled it all well but her limited time meant that there were plenty of times where anything that wasn’t work had to take a backseat.
This is completely normal for many people and isn’t something that means you can’t be successful with money. The issue for Charlie was that her money management was such a manual process and had so many steps involved that when there wasn’t enough time to focus on this, the plan simply fell apart. If you’re time poor or just don’t enjoy spending your spare time on money management, DON’T set up a strategy that requires loads of your time input. You’re setting yourself up for failure; it just won’t happen.
When it comes to things you don’t like doing, the most effective processes are those that need the least amount of your time to manage. A money management system or strategy that requires a lower time input will mean you have more of your valuable free time to spend on other things, which in itself is beneficial. The hack to making smart money choices when you’re time poor is to keep things simple. If having more free time was the only benefit to setting up a ‘low-touch’ money management strategy, it would be worth it. But there’s another benefit which is even more important.
The less time spent on your money management, the more likely you are to get the results you want. This is because your smart money strategy doesn’t rely on you having to find extra time (read: time you don’t have) to manage and track what you are doing. It also allows you to set success as your default and hit the magic ‘autopilot’ button, so everything can just flow in the background as you steadily ‘tick off’ your money and lifestyle targets. There’s some science to all of this, which I cover off on in this article.
Thankfully for Charlie, this wasn’t the first time I’d seen this sort of issue. We spent some time understanding all the inputs and putting together an automated strategy for her. Once we hit the ‘go’ button, everything just happened after her next payday. Charlie could get on with her work and the other things that were important to her, knowing that what she wanted to happen with her money was actually happening. Charlie was being smart with her money, without it taking up her very limited spare time. Charlie has been kicking serious butt ever since.
Unless you make a conscious effort to set up your finances in a streamlined way, it’s easy for your money management to get out of control. I see so many people that tend to accumulate bank accounts, random financial products, apps, and spreadsheets to ‘help’ them manage their money better. The result over time is that our personal finances can become so complex that it’s difficult for us to even know where everything actually is, let alone where it should be. It also makes it difficult for us to get everything working together and heading in the same direction.
Take the time to simplify, streamline, and automate as much of your money management as humanly possible. This will mean you’ll be making smart money choices, and you’re able to spend less time on money management and will have more time available for the things you really enjoy and want to do. It will also give you a much higher chance of getting the results you want because you don’t have to actually ‘do’ anything to make it happen.
This hack is extremely powerful but frequently overlooked. Please, don’t make this mistake.
You don’t have to make huge sacrifices to achieve money success, but you do need to the rules of the game. Get Unstuck outlines a proven, simple but highly effective framework to help get your financial sh!t together and ‘adult’ with money.
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