Why You Need a Time Budget — and How to Create It

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Stretched for time? Nowadays, who isn't?! Successful time management isn't as elusive as it might seem. Creating a "time budget" can help.

Why a time budget? Just like a regular budget helps us track and manage a limited resource — our money — a time budget can help us track an even more precious resource — our time. If we go over one of our spending categories in our money budget, we borrow from another account, such as entertainment or food (or from a credit card). And if we go over a time budget account — such as spending too much time at work, we have to borrow some time from elsewhere, like family time, or sleep time. (Fortunately, so far, there's no credit card for time.)

A time budget can help us plan how we use our time, so we are sure to spend it as wisely as possible. Let's spend a few moments creating one. (See also: The Single Greatest Key to Managing Your Time)

1. Take Stock of Your Time

The first step of any budgeting process is to take inventory. For one week, try to keep a detailed time log, noting — as precisely as possible — how you spend your hours. You can use a plain old spiral notebook, a calendar, or download a free time tracking app for your smartphone, like the ATracker (the full version is available for a fee). It doesn't matter which tool you choose, just that you faithfully use it.

At the end of the week, step back and analyze your time inventory. Take a look at how your activities fit into categories relevant to your life — work, family, school, fitness, religious practice, community, leisure, or other areas.

Fixed versus Discretionary Time

In addition to categories, look at "fixed" versus "discretionary" time expenses. Time is no different than money when it comes to the dividing line between the "musts" (fixed) and the "wants" (discretionary). Whether you are the parent of a young toddler, or a high level corporate executive — or both — there are certain things that you likely must do, sometimes as part of a daily routine, but often on an ad hoc basis (a visit to the dentist, a meeting with the sales team, or attending a teacher conference).

You might be surprised to find that you spend way more time than you think on tasks that are relatively low on your priority list, and vice-versa.

2. Create Your Budget

Once you have a better understanding of how you currently use your time, you're ready to move on to creating a time budget designed to maximize the hours of your day. There are a few different ways to go.

1. Use the Mayo Jar and Two Beers Method

The Mayonnaise Jar & Two Beers method illustrates the importance of filling your days in line with your priorities. Standing in front of a lecture hall, a professor shows his students that you can fill a jar with golf balls — it's as full as it can get, right? But then he squeezes some pebbles into the jar, and then sand. The point is that as busy as you think you are, you can always make more room for the things that matter most in your life, including taking time to enjoy your relationships (hence the two beers).

What are your "golf balls?" For some, the most significant priorities revolve around work, while for others, it may be family, fitness, or religion. Prioritize the things you value most in your life, and allocate the hours in your day accordingly.

If building your career is most important to you right now, then the biggest (or most productive) time slots in your day should be allotted to work.

2. Use the Envelope System

Replicate the "Envelope System" of budgeting, substituting time for money.

The envelope budget system involves literally dividing cash into envelopes for each spending category (household expenses, food, transportation, clothes, etc.). This system works for time, too. You do not need envelopes (seven columns on a sheet of paper might do the trick), but it might be a fun exercise to help you visualize your time commitments per category:

• Lay out seven envelopes on a desk or table, one for each day of the week.
   
• Using colored index cards (each color corresponding to a time expenditure category — family, work, exercise, etc — write an activity and the time it takes to complete.
   
• Now fill each envelope with what you think will fit into each day of the week.

If the amount of time represented on your cards in any of your envelopes adds up to more than the number of your waking hours you have in that day, you may need to do some shuffling.

3. Use the 50/30/20 Budget Rule

The 50/30/20 budget rule — which allocates percentages of your income to fixed expenses (50%), discretionary spending (30%), and saving (20%) — can also be adapted to create your time budget.

Fixed Time

Let's say it takes you an hour to walk the dog, shower, eat breakfast, and pack the kids' lunches. The hour you spend attending to your typical morning routine is one example of a fixed time expense. Other fixed time expenses include obligations, or "musts." (See also: 15 Essential Life Hacks That Will Save You Time in the Morning)

Discretionary Time

Discretionary time expenses might include lunch with a friend, getting a massage, or perusing Facebook. These times are the hardest to measure (who times a phone call with Mom?), but they can gobble up more time than you realize if not kept in check. One idea that works for some people is to bundle all social interactions — chatting with co-workers, Skyping with friends, using social media — into an hour at various intervals of the day. This way, it becomes a more predictable element of your time budget.

Saved Time (or "Wasted" Time)

Because time can't be banked and used at a later date, the savings part of the 50/30/20 equation is not as clear cut. But perhaps a good substitute might be unpredictable time wasters. Let's face it: It's not uncommon to get stuck in traffic — or stuck in a conversation with an overly chatty neighbor who is oblivious to the nonverbal clues that you are done listening to stories. These kinds of non-intentional time gobblers are fairly unavoidable; you may as well build them into your time budget. If you don't need all that allotted time, move it into the discretionary column!

3. Live it, Love it, or Revise it

A time budget is a guide. It only works if you stick to it. But it is not set in stone — and you're the boss!

Time expenses — fixed and discretionary alike — need to be handled at time intervals that make sense in your life. For some people, it may be monthly, and for others, weekly, or even daily.

Accept the fact that life changes — by season and by circumstance. Adjust your time budget accordingly.

How do you manage your time? Take a moment and share in comments!

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