Personal Time Budgeting - Part 3
This post is the third of six posts on developing your Personal Time Budget (aka Life Budget).
In previous posts, I established categories for tracking your personal time and how to calculate the equivalent hourly cost for doing (or not doing) specific life activities. In this post, I’ll walk you through how to calculate your current time income and expenses so you can see how you are doing.
I recommend the following 4 step process:
1) Select a tool for tracking. This could be a spreadsheet, an online time tracking tool, or even just a paper log that you keep. Make sure it has a way to identify which Life Budget category your are tracking to.
2) Track your time. I recommend doing this for at least a month. This is an area where you should not estimate, but should actually write things down (or log online) as they happen. You’ll be very surprised at how much of your time is used up on random things. Do this daily if possible. Personally, I’ve had pretty good luck with the Toggl online tool (see the link above). What I like about it is that you can set up each Life Budget category as a ‘Project’ and easily track all your time during the day easily. It also has some nice reports. I’ll post later on details of how to use for Life Budget purposes. More on this in the fifth post in this series.
3) Calculate your current income and expenses. Apply the hourly rates for each activity from the last post, and determine whether you are going into Life Debt, or getting positive returns on your life. The important thing to remember is that just like with time, if you don’t spend it on important things, that time is lost forever. If you meet your Time Budget, you break even. You can only get positive returns once you have taken care of everything else first.
Obviously the specific dollar amount isn’t equivalent to anything in real financial terms (you haven’t lost the ability to go buy something for that price), that isn’t the point. The point is to track how well you are doing over time. Are you decreasing the loss of Life Budget income every day? Are there certain areas that cause you to lose more income that need to be worked on? A Life Budget is just a good way to track progress against your life plan, using financial terms to make it easier to understand.
If you get stuck on this step, don’t worry, I’ll provide more details on how to set up a Life Budget in the next post.
4) Identify areas for modification. You’ll likely see some major items pop out as being the cause of going into Life Debt. In the next post, I’ll describe some ways to implement a new Life Budget, and how to keep on track.