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WHEN I WAS A TEENAGER, my father and I went to the local mall. I don’t recall why we went shopping together, but I do remember going into a Tandy craft store and buying a customizing kit for leather belts. Tandy Corp. would later become well known as the owner of RadioShack.
On the way home, my father and I were talking about the kit, and I made the comment, “It’ll be a good way to kill time.” My father shot back, “Never kill time.” Later that year, he died of a massive heart attack.
While I never forgot what my father said, I wish I could tell you I took it as inspiration and went on to accomplish great things, but I never did. I did use time well, but I also wasted time, killed time and have blanks in my memory where I’m not sure how I used my time.
But that’s changed. Today, I pay more attention to the ages at which people die. Suddenly, people my age and younger are dying of natural causes. Just yesterday, I went to the dentist for a checkup. As soon as I sat in the examination chair, he told me that his wife recently died, and yet previously she’d almost never been sick.
Such stories have changed my perspective on life and money. We can always make more money. But we can’t make more time, and we never know how much more we have. This makes time the more precious commodity. Still, we should carefully consider how we use both money and time.
Money can be saved, invested and spent. My wife and I aren’t great investors. But we’ve been good savers and thoughtful spenders.
My wife’s family were blue collar. When she was growing up, her family’s budgeting process consisted of separate envelopes marked for each expense, such as groceries and vacations. My family didn’t use this method. Instead, when I was growing up, my family just saved, with no particular plan for how to use the money. This is what I’ve also ended up doing.
My method makes my wife uncomfortable. She likes knowing there’s an envelope marked “vacation,” so she knows what kind of vacation we can have based on the amount in the envelope. My method doesn’t involve this mental focus. For me, money is just money. It’s “dry powder,” ready to be spent when and where needed. My wife’s preferred method involves more deliberate choices—a good thing—while my method offers more flexibility, which is also a good thing.
Whatever method we adopt, both money and time are there to be used, and preferably used without waste. We will, of course, make mistakes because we’re human. Still, if we’re thoughtful in our choices, we reduce the possibility that we’ll lie on our deathbed, regretting the things we could have done with our time and money.
“ We can always make more money. But we can’t make more time, and we never know how much more we have.”
We can trade off money for time. I could take public transit to work but I’d rather save an hour of time each way and go in my car which requires purchasing, gas, insurance, and maintenance. I can spend 1-3 hours a week on the yard or hire a company to take care of it. And so on…
Reminds me of it being wiser to spend money on experiences rather than things and to emphasize novel experiences because they slow time.
After reading the responses to this excellent article, one truth emerges…
It’s not WHAT budget system you use, it’s that you USE a budget system.
At 73 and recently retired, I am aware that time is more valuable than money. Having waited to retire and to claim my social security benefits (which I did at 70, to max out my benefits for my wife) our social security income is sufficient to cover 111% of our annual expenses. This will allow us to enjoy a $100K income for the rest of our lives, with $15-$20K a year in travel, without exceeding 2% withdrawals from our portfolio.
I will run out of time well before I run out of money, and isn’t that what we all want?
No, honestly, I’d prefer to have a little more money than time and enjoy the spending but after years of thrift and fear, it’s a challenging transition. If someone left you a few million dollars, would you know how to spend it?
Despite my parents being successful professionals, they surprisingly lacked interest in investing or managing personal finances. Growing up, we lived from paycheck to paycheck, and despite having a pension, inflation took its toll, leaving them house-poor in retirement.
Reflecting on this, I’ve come to understand that they didn’t fully grasp the impact of inflation. Consequently, I made a conscious effort to focus on “real” returns, which heightened my awareness of risk.
This mindset shift has proven invaluable in navigating financial decisions, hopefully ensuring a more secure future for my family.
I never heard anything about money growing as a child but my wife’s family sat down every Friday when her dad got paid to stuff money into envelopes to pay bills. They would spend their Saturdays driving around paying those bills.
Years ago before banks mentioned it my wife wanted to title different accounts at our online bank like the envelopes she grew up with. So to this day all of our income goes into our “rainy day” account. From there percentages of it automatically gets transferred into our “checking account” , “car account” , and”vacation account”. Using this process we haven’t taken a loan out for our last three vehicles because we don’t buy until we can pay cash and the same goes for it vacations. We charge almost all of our spending for everything so we can see every month where our money goes and we pay it off every month.
As a side note every one of our monthly bills are on automatic payment so I never wrote a check. For us this system is simplicity at it’s best.
I’m right with you my friend. Simple and automatic plus never overspend.
I like to self escrow an amount monthly that is sufficient to fund known and expected large annual or semi annual expenses such as home, umbrella and car insurance, property tax and the like. When interest rates were next to nothing the amount just sat in our general checking even though I set aside the amount as if it were a outstanding check. Since I can now earn over a 5% rate in my Vanguard taxable settlement account I now do an electronic cash transfer out monthly and then a transfer back when the underlying obligation is due. The earnings generated is enough for a nice meal, a small reward that also makes paying our bills easier. I still have some work to do on our emergency fund.
I do this with our annual property taxes, too. One of my cash accounts is an online savings bank that’s now paying close to 5% interest. I divide the property tax payment by 12 and have that amount taken out of our main checking account every month and transferred to the online savings. When it’s time to pay property taxes for the year, I transfer the full amount back to my checking account and start over. I guess a little high on the monthly amount so that I’m covered if/when the property taxes rise. So far, so good.
As for the insurance, I have most of our policies (cars, home, umbrella) with the same company and have them bundled into one monthly payment that’s on autopay. Makes it much easier.
“Does killing time harm eternity?” My philosophy professor wanted to know.
I’m aware of how much is coming in, how much is going out soon, and how much will be going out down the road. These are solid ballpark figures, not to the last penny. This is mostly done with 2 checking accounts. The retirement accounts are not being tapped yet.
Most of the time this works well for me. Occasionally I’ll sit down and give myself a financial audit of sorts.
Try our method. We have multiple bank accounts at the same bank. Each month money comes in and is automatically allocated among the accounts we have labeled House checking account, Connie’s checking account, Travel and Expenses.
All ongoing expenses – utilities, property taxes, HOA, etc. – auto taken from Expenses account. Paying credit cards and my cash is from House account and Connie’s cash along with miscellaneous donations come from Connie’s account. Travel is just that.
Both deliberate choices and spend as needed.
Dick, I do something similar without needing multiple accounts. I use a single money market account with a linked checking account and keep track of how much of the balance is allocated for various purposes, using a pencil and paper ledger.
I let the bank do the pencil and paperwork. 😎