Savour your spending
In today’s fast-paced world, managing your finances can feel like navigating a complex maze. Balancing budgets, saving for the future and dealing with unexpected expenses can quickly lead to financial overwhelm.
The key to regaining control lies in effective prioritisation and how you manage your time. One powerful tool that can help you tackle financial chaos is the Eisenhower Matrix.
This technique is based upon being able to distinguish between tasks that are urgent and those which are important.
Urgent v Important
Understanding the crucial distinction between what’s urgent and what’s important is fundamental for building up long-term financial security.
Urgent tasks are those demanding immediate attention, often with impending deadlines or consequences. These might include paying overdue bills or addressing emergency expenses.
On the other hand, important tasks contribute significantly to your long-term financial wellbeing, but may not have immediate deadlines. Think of all those financial jobs that keeping getting kicked into the long grass:
- setting clear financial goals
- creating a budget
- making a will
- arranging life and health insurances
- investing for the future
- reviewing your pensions
While urgent tasks often grab our attention due to their immediate consequences, neglecting important tasks can lead to missed opportunities for financial growth and stability.
Striking the right balance between urgent and important financial matters is key to reducing short-term stress, whilst improving the chances of long-term success.
Understanding the Eisenhower Matrix
Named after the 34th President of the United States, Dwight D. Eisenhower, this matrix is a simple but highly effective decision-making tool. It categorises tasks into four quadrants based on their urgency and importance:
1. Urgent and Important
These are tasks that demand immediate attention and have a significant impact on your immediate wellbeing. Examples include paying bills, addressing overdue debts, and handling emergency expenses.
2. Important, but Not Urgent
This quadrant is reserved for tasks that are crucial for long-term financial wellbeing, but may not require immediate attention. This is the stuff that is very often neglected and may include reviewing your income and outgoings, investments and pensions, wills and powers of attorney.
3. Urgent, but Not Important
Tasks in this quadrant may seem urgent, but don’t contribute significantly to your long-term wellbeing. These can eat into your time and distract you from more important matters. These are likely to be personal to you, but it could include obsessing over the tiniest details of your finances.
4. Not Urgent and Not Important
This quadrant represents tasks that neither demand immediate attention nor contribute significantly to your financial goals. Minimise or eliminate these tasks to free up time for more meaningful activities.
Applying the Eisenhower Matrix to your finances
DO: Prioritise Urgent and Important Tasks
Start by addressing any immediate financial crises. This may involve paying overdue bills, dealing with unexpected expenses or re-arranging expensive credit. Tackling these urgent matters first will provide a sense of control and immediately ease any feelings of financial overwhelm.
SCHEDULE: Invest Time in Important, but Not Urgent Activities
Devote time to tasks that contribute to long-term financial stability. Chances are these tasks will take longer to complete, so break them down into manageable chunks. For example, you could commit to 15 minutes per day to create a budget, set financial goals or review your pensions. Investing your time in Quadrant 2 activities helps prevent future financial crises.
DELEGATE: Minimise Urgent but Not Important Activities:
Be mindful of activities that seem urgent but don’t align with your financial goals. This could include time spent on non-essential financial news or unnecessary meetings. Streamlining or delegating these activities will free up time for more impactful tasks.
ELIMINATE: Not Urgent and Not Important Tasks
Identify and eliminate tasks that neither contribute to your financial well-being nor demand immediate attention. These can often be tricky to identify, so you need to be quite ruthless and challenge yourself to cut out timewasters. Social media “doom-scrolling” anyone?
A Case Study
I had the great pleasure of working with an entrepreneur last year, who was spinning a lot of plates. All of her ideas and projects were geared towards building financial freedom for the future, but it was all getting too much.
She listed everything that was on her mind and explained that frustratingly little progress was being made and exhaustion was creeping in. Here’s a summary:
- Working full time to pay the bills and to start investing
- Studying part-time for a degree
- Building her own website to launch a digital marketing business
- Building another couple of websites for clients
- Writing self-published books for sale on Amazon
By using the Eisenhower Matrix, she was able to prioritise tasks and bring a much greater degree of focus to her life.
Finishing the websites for clients was deemed ‘urgent and important’ as this could be done relatively quickly and bring in cash to help with the next task.
The build of her own website was deemed to be ‘urgent’ but not an ‘important’ use of her own time. The decision was made to outsource the technical build of this, using money from the first task.
The book publishing was judged an ‘important’ way of building future passive income, but it’s more of a long-term project, so not ‘urgent’. This was placed on hold until the websites were finished, with a pause in publishing software subscriptions to save money in the short-term.
But what about “Not Urgent & Not Important”. Well, this brought out some very creative time-saving ideas around domestic chores and other habits. By thinking more generally about daily routines, additional time was saved by making a few adjustments to cooking, cleaning and exercise regimes.
Summary
Financial overwhelm is a common challenge, but with a bit of refection and planning, it can be conquered. The Eisenhower Matrix provides a clear framework for prioritising tasks, enabling you “clear the decks” and focus.
If you would like a template of the Eisenhower Matrix to use for yourself, click here for a PDF copy.
By focusing on what truly matters and proactively addressing long-term goals, you can beat financial overwhelm and pave the way for a more secure financial future.
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