Just as good time management requires a calendar, good money management requires a budget.
Consider these similarities between time and money and the management of them both:
1. Money and time are finite. Just as there are only 24 hours in a day, there is only a finite amount of income in a month. Can you imagine what it’d be like if you could get a time “credit card”?
2. Advanced planning increases effectiveness. Who hasn’t started a day with great intentions of getting lots done, but ended the day having achieved hardly anything because they didn’t have a plan? Planning your day helps you do more. Planning your spending helps your money do more, too.
3. It’s easy to waste both time and money. Without conscious planning and follow-through you might spend more time watching TV or more money on eating out than you would otherwise.
4. Time and money present a forced choice. According to the laws of physics regarding the space-time continuum, you can be in only one place at a time. Similarly, your dollars can be spent on only one thing at a time. (It’s a bummer of a limitation, I know.)
5. There is an opportunity cost associated with the use of time and money. Using your time or money on any one thing “costs” you the opportunity to use it on something else. For example, your fancy coffee drinks may cost $20 a week. Not only is the $20 a week gone, but so is the opportunity to invest it instead. Losing that opportunity could cost $200,000 over 30 years (with an average 10% rate of return). Ouch.
Worthy of consideration: What do you want to do with your life? Whatever goals you have, know that planning your spending and your time will be essential in achieving those goals.
