Time is money. You’ve definitely heard this phrase before, but have you ever really thought about what it means?
For time management researchers like Brad Aeon, it’s an intriguing idea. Aeon sees time and money as two sides of the same coin. He looks at the phrase as a mathematical equation: If time is money, then money is time. After all, he explains, if you receive a paycheque for hours spent at work, you’re essentially spending actual hours of your life whenever you make a purchase.
So how can we manipulate the math to get the most out of life? Since time and money are so intricately, intimately connected, it makes sense that managing the hours of your life can help you get a handle on your finances.
Aeon has a minimal approach to time management—”All you really need is a schedule and a to-do list”—and his approach to personal finance is similar. “When I’m deciding what to do with my day or my dollars, I always ask myself: Is it going to make me happy in the long run? If it’s not contributing to my goals, it’s not worth it.”
How can I save more money?
In theory, spending (or saving) towards your goals is great, but we all make mistakes. A good way to make sure that you stay on track to reach your goals is to track your finances. “You know how at the end of some days you think: Where did all the time go? The seconds just fly by and it can be the same with cash if you’re not keeping an eye on your expenses,” Aeon explains. He tracks all his transactions to make sure that he is spending on the things that actually make him happy. Tracking what you spend gives you a clear picture of where your money is going and makes it easier to align your spending with your goals.
You can also help yourself out by setting several smaller, shorter-term goals. Saving a large amount can feel very overwhelming. Aeon explains that it can be particularly difficult for people who have a tendency to discount time or, in other words, devalue rewards that are further away in the future. If you discount time, it can be harder to reach your saving goals because you’re more likely to opt for instant gratification over a long-term reward.
Luckily, you can help yourself out by working towards saving several smaller amounts that are easier to achieve (like $100 a month) instead of stressing over one big sum (like $1,200 by the end of the year). “Small wins give you the motivation to keep going,” Aeon says.
Sticking to a regular routine is another way to keep your finances in order. Aeon explains that the little things that you do repeatedly can lead to extraordinary outcomes. Wonderful things can happen because the little things add up.
“In college, I saved $50 a month, and it doesn’t sound like much but over the years it grew substantially. That’s the beauty of routines: They simplify life. For most people it makes sense to save by establishing a routine.” Automating your savings is a great way to get a routine going with your finances.
How can I save more time?
Tracking what you spend, setting short-term financial goals and sticking to a saving routine are easy techniques to help you take control of your finances, but ultimately time is more valuable than money. “You have to strike a balance that works for you between spending money and saving time,” Aeon says.
In some instances, it’s smarter to spend than to save. Think about the things you hate doing and consider if there is a way to buy those moments back. Laundry? Cooking? Cleaning? If you can afford to outsource some of these activities, you can free up more time in your schedule to do what makes you happy.
That’s why investing in more time is a wise choice. “In North America, if we aren’t busy, we’re considered lazy or we start to feel guilty. But, despite the social pressure to constantly be doing something, I think it’s smart for people to buy time if it means they’ll have more minutes to do what they love,” says Aeon.
In fact, Harvard researcher Ashley Whillans found that people were happier when they bought themselves hours by outsourcing tasks. Whether you’re spending on laundry service, a meal kit delivery or even a robot vacuum, buying time can be a good investment in your happiness.
Now, you may be thinking that the easiest way to reach ambitious financial goals is to get a raise. But earning more doesn’t necessarily mean you’ll save more: A raise can mean longer hours that go hand in hand with stress. If you’re stressed, you might make irresponsible financial decisions, like indulging in shopping therapy. “If you go shopping to relieve stress, it costs money. That money comes from hours and hours of work so it’s kind of a vicious cycle,” says Aeon. You work more, but you need more income to feel good and that means less money to save. Saving money is important, but so is saving time for life. If you can strike a balance between the two, you can really have it all.