Agile Personal Development

I’ve been traveling a lot for work lately (which explains the lack of posts). I’ve always been a big fan of “packing light”. With the latest plans for the airlines to charge even more money to pay for checked luggage, it is especially important now to be able to carry everything on.

I have a great bag (similar to this one, but larger) for business travel. I especially like the ability to convert over to a backpack mode - great for moving quickly through an airport. I normally roll up my non-dress clothing to avoid wrinkling. For dress shirts and slacks, I’ve folded them up inside of an Eagle Creek Pack-It Folder. For the most part, this roll and pack method worked, except I still ended up with large wrinkles in my shirts. I usually wrap them in plastic dry cleaning bags which keeps the small wrinkles from appearing, but I still have the large folds and creases from being folded up. I noticed this seems to be a bigger issue for shirts that have some starch in them.

On my latest trip, I’m checking out “bundle packing” from the OneBag.com site. I’ve been a fan of OneBag for awhile, there are some good tips for what to take and what not to take on a trip. After packing for this latest trip using the bundle packing method, I definitely felt like I got a lot more clothes stuffed into a smaller space that usual. At the same time, it seems like I’ll probably end up with similar large wrinkles to what I got with the folding and rolling methods. Another downside is that it definitely took longer to pack.

Even with the downsides though, the fact that I crammed so many clothes into a small space has me really excited about using this new method in the future. I love having a little extra space in my bag (and being able to easily carry it on), since it seems like it is always harder to fit everything back in on the way home.

This is the sixth post of six on how to establish and track your Life Budget.

For those of you just joining in, I’ve described in previous posts how to put your personal time into financial terms, establish a budget of hours per week for certain life activities, and then track those activities using financial terms. In this post, I provide some ideas on how to use personal finance concepts to manage your Life Budget.

There are many good posts out there on how to manage your personal finances. Two in particular I like is this one from the Simple Dollar that highlights the key concepts of personal finance on the back of five business cards, and another good one from Get Rich Slowly, one of my favorite personal finance blogs. Both have ideas applicable to managing your Life Budget. I summarize their general concepts below.

1) Spend Less Than You Earn. This is a fairly easy concept to implement in your Life Budget. You can never create more time in a day, so every hour that passes is gone forever. You need to make sure you are working to increase the amount of time you “earn” Life Income (investment in spending time with your children or on your own personal development), and reduce the amount of time spent on non-value added activities like watching TV or mowing the lawn.

2) Reduce Frivolous Spending. In personal finance, a lot of advice is targeted at living frugally by reducing your expenses. The same applies for your Life Budget. Instead of spending a lot of time on tasks that don’t add any value to your life (e.g. watching the latest reality show), ask yourself whether you really should be spending time on it. Does it align with your personal vision? Does it help you move forward on your personal development plan? If not, you’ll see the negative impact as you track your Life Budget at the end of the week. You need to target maximizing every minute of the day. Once you start tracking your Life Budget, you become a lot more conscious of ‘dead time’ during the day when you really aren’t focused on something useful.

3) Pay off Debt. The purpose of paying off debt in personal finance is to free yourself from someone else owning part of your life. This also frees up your income for spending on other things that are more important to you. A similar concept in your Life Budget is reducing the amount of time you spend on required life activities so you have more time for spending with family or pursuing your personal development goals. For example, you might hire someone to do the task for you, like hiring a service to mow the lawn. Ironically, this may run counter to your personal finance goals of reducing financial expenses. However, this is something that needs to be considered if you find that you don’t have enough time in the week to do those really important things.

4) Set up an Emergency Fund. This is another key concept in personal finance. The idea is to save up enough money to be able to cover your expenses for a period of time (typically 3-6 months) in case there is an emergency. Within your Life Budget, the concept of ’saving up’ time unfortunately doesn’t apply. There isn’t a way to bank your time to use at a later time. Use it or lose it! One way to look at the emergency fund in a Life Budget context is reducing the amount of time you’ll need to spend in the future by taking care of something today. For example, if you spend a few hours learning how to do something correctly (e.g. minor home repairs), you will save your self time in the future. If flushing out your water heater once a year will save you the many hours (and dollars) cleaning up the mess in your house when it floods (the future emergency you are preparing for), this is extremely useful time. If you do encounter a real emergency, you’ll also find that many of the things in life that you *have* to do today become an after thought. If your child is sick in the hospital, the last thing you are going to worry about is how you are missing opening night of the latest summer blockbuster. This kind of thinking can help put things into perspective.

5) Invest in the Future. An essential part of any personal finance plan is preparing for the future through investment in retirement and college savings plans. This is exactly the same as the time you spend investing in raising your children, working on your marriage, or working on personal development. Just like with saving for retirement, the earlier you start saving, the better. If you wait too long to start taking care of these things, you’ll have wasted much of your life. This is why you need to focus on these types of activities every week. You’ll never be able to invest enough later to make up for lost time today.

6) Get Educated. To improve your personal finances, it is critical to research different methods for how to meet your financial goals. This includes learning about different investment types, techniques for reducing debt, and understanding the concept of compound interest. This applies to managing your Life Budget as well. There are tons of ideas out there for time management, how to better balance the time you spend on work and life, and ways to invest in yourself and your family for a better tomorrow.

As you implement these personal finance concepts, you may find that even though you have the greatest intentions, you have a hard time sticking to your Life Budget. Brad Isaac’s Persistence Unlimited blog has a good post on typical reasons that people don’t meet their goals. Establishing and tracking your Life Budget is intended to address many of these issues, like not knowing how much time to spend on different activities, not being consistent in how much time you actually spend on activities, and not taking advantage of all the time you have available.

Overall, I recommend not getting to hung up on getting everything perfect, but use your Life Budget as a continual reminder of how you are spending your time. This helps to identify recurring issues in your life where you are not ensuring enough time commitment to the higher priority items in life. It is very easy to lose track by

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.