Personal Time Budgeting - Part 5
This is the fifth post of six in a series on establishing and tracking your life budget.
In this post, I’ll discuss methods for tracking your life budget. I’ll also discuss how to calculate your ‘Life Debt’ or ‘ Life Income’ for unique situations.
I was initially hopeful to find a simple online tool (free, of course) that was intended for personal finance budget tracking that could be modified to track your Life Budget. Unfortunately, I tried three such services, and struck out with all of them.
I tried JustBudget.com, but there were a lot of problems getting the tool to set up expenses and incomes when specific categories had not been created yet. On the positive side, you can make your own categories, allowing you to match up with the Life Budget categories described earlier.I also tried MySpendingPlan.com, but found that the application froze up after entering almost anything new. Very frustrating. You also had to go through some initial advertising at the beginning which seemed to lock up the tool. After trying to set up a simple budget and running into a lot of problems with the application crashing, I gave up. I then tried BudgetPulse.com. This application was much easier to set up initially, but then I ran into problems trying to set up recurring expenses and incomes. While this might work for personal finance, where you just input expense and incomes as they happen, it makes it very difficult to track a Life Budget. You would need to input a separate expense or income for every category of Life Budget every day. Not good. I also looked at a number of the more sophisticated online personal finance tools, but most of them were built to connect with your financial institution and download your actual financial data, and were hard to tailor for time tracking.
In the end, I decided to go with Toggl for actual tracking of my Life Budget, and use a spreadsheet for analysis of my weekly budget. I’m hopeful that someone will point me in the right direction of a useful online tool I can use, but for now, I’ve hacked a temporary solution together. Leave me a comment with other good ideas, please.
Here is how to do it:
1) Set up an account with Toggl. This was pretty easy. When you set up your “Client”, I used “Life Budget” instead. I also found it easier for tracking if the week starts on a Sunday instead of a Monday. That allows you to tally your weekly status on Sundays, and are able to use last week’s data. Otherwise you end up tracking a half day (Sunday), and things don’t add up.
2) Establish a “Project” for each Life Budget Category. If you use my recommended categories, you’ll end up with eleven projects. These are things like “Work”, “Investment - Personal Development”, “Exercise”, etc.
3) Start Tracking! What I’ve found works best is to start and quickly stop a task against each of the Projects at the beginning of a week. That gives you a short duration (~1 second) completed task against all your projects when you start the week. This helps out later when you run a weekly report. You’ll have all tasks included in the report (even if you don’t spend time on them during the week), making it easier to copy into a spreadsheet.
4) Run a Weekly Report. At the end of each week, go into the “Reports” tab of Toggl, set up the appropriate time period (if you are running it on a Sunday, then just click on “This Week”, otherwise change the dates), and click on “Project Statistics”. This should tally up the hours spent on each category of Life Budget. Take a look to make sure it make sense - you should have at least 168 hours for the week. If you multi-task (see below), you might have more hours that that. How did you do against your targets? Once you take a quick look, export the file to a CSV (there is a little icon in the upper right corner of the report).
5) Set up a Tracking Spreadsheet. As you start generating weekly reports, you’ll want a way to calculate your Life Budget and whether you are going into Life Debt or generating Life Income. This is where I need to find a tool that both tracks and calculates the budget. But for now, I recommend using a spreadsheet. Set up a worksheet with a spot for raw data entry from the weekly CSV file. Then set up another worksheet with the calculations for each weekly report. This includes your budget and calculations of how much you made (or lost) each week. Then another worksheet is good for tracking each week’s information.
6) Start Watching your Life Budget Trends. The exact amount of “money” you make or lose every week in your Life Budget is not that important. What is important is whether changes you are making to balance your life are working. Are you getting out of Life Debt? Or are you slipping up every now and then.
There are probably a few situations that you’ll run into when going through this exercise. Here are my recommendations on how to address them.
Multi-tasking. What do you do if you’re doing two things at once? Two ways to address this, depending upon which tasks you are doing at the same time. If there is no impact to either task by doing them together (e.g. working on personal development activities while you are commuting on a train), count the time against both categories. If the multi-tasking has an impact on how well you are doing one of the tasks, you need to split the time between them (e.g. if you are trying to write something and cook dinner at the same time, you probably aren’t as efficient at writing with the distraction - so split the time between the tasks).
Working extra hours. If you work more hours in a week than you budget, you are losing: 1) the equivalent hourly rate for each hour over budget, and 2) the delta hourly cost between your budgeted hourly rate and your actual hourly rate for all the budgeted hours. Here is an example. Let’s say you make $60K a year, and have budgeted 45 hours a week. That works out to be about $25.60 per hour (your budgeted hourly rate). If you work 50 hours in a week, your actual hourly rate is $23.08. So your current income (loss) is the 5 hours of time over budget times the actual hourly rate of $23.08, for a total of $115.40. However, you have also devalued the 45 hours you budgeted. Instead of being worth $25.60 per hour, they are only worth $23.08. The delta hourly cost ($25.60-$23.08 = $2.52) times the 45 hours of budgeted time is another $113.40. That is a total income (loss) for the week of $228.80! The worst part is that if by working the extra 5 hours you didn’t have time for exercise (worth $21 per hour), you also lost an additional 5*$21 = $105. That is a total of about $334 of life budget.
In my next post, I’ll describe how to use some ideas from personal finance to manage your Life Budget over time.