|Image from Efficiency Time Table Matrix|
Many people are currently lost and trying to figure out what to do with their finances. Some of them prioritize the things that they want but not what they need. While others follow the crowd or the fad. How about you, who do you follow?
The Stephen Covey matrixis designed for time management system but this is also helpful when it comes to your finances. Once you treat your finances very well you will surely reap those rewards because right priorities will be emphasize.
Quadrant I is for the immediate and important deadlines. This is the foundation of your financial house. You start it brick by brick and this is a “must”.
1. Have a vision, goals and budget for this week, month and year – You need to sit down and have some blue print to achieve a solid structure of your financial house. Every house or a building started in a drawing board or in a piece of paper. You got to start right or else you will waste your time.
2. Start having an Emergency funds – Once you are good with your budget try to allocate a portion of your salary for emergency funds. Make it 10-20% every salary. If you won’t do this and something happened, you will surely be in debt.
3. Start getting Insurance- You will die and we don’t know when and how. Sounds morbid but that’s the truth. You need to have a protection so your relatives or love ones will not suffer financially.
4. Focus on Long term Investment– Time is your ally when it comes to investment. Procrastinate on this and your future will be dependent with Social security benefits. Imagine, as of this writing SSS can give you a max of 9000 per month. Can you sustain your lifestyle now with a rising cost of goods once you retired?
5. Pay your debts or totally get rid of your credit card – If you think credit card is for emergency, think again. Sooner or later you’ll end up a slave of your own behavior if you continue thinking that way. However, you can easily reach your financial goals by removing those consumer debts. Practice discipline and never run away from your responsibilities.
Quadrant II is for long-term strategizing and development.
1. Read books and blogs about personal finances– When you invest in books and you follow the principles the rate of return will be huge. It will cost you a lot once you rely on your personal experiences. Get a guidebook about personal finance since it will be more efficient to follow a system that’s proven and tested.
2. Plan your budget – Don’t fall in love with the first budget plan that you made. Always make necessary adjustment. Do it every week and evaluate your behavior towards your spending pattern. Your good habits will put you at the top.
3. Attend financial seminars- When you have time and money never miss the chance to simply listen to the leaders of the personal finance industry. Parallel to that is if you love attending live concerts the experience is really different. Increase your knowledge and you will save yourself from a crisis.
4. Get a financial coach – Financial coaches want you to win but if your parents, grandma, neighbors are your financial coaches but they are currently in a financial woes please think carefully about their advices. You need to seriously talk to someone who is credible and who can walk the talk.
5. Listen to a free podcast about finances– At this the age, we are so privilege to have so much information on the palm of our hand. While you are traveling you can use those apps in your phone for free to enhance your skills. Instead of wasting your time in a traffic jam you will be empowered when you focus your brain to something that’s going to make you better in a long run.
6. Virtual shopping for financial products like insurance, mutual funds and stocks– You can maximize your money whenever you compare prices since almost all financial products of different companies are uploaded on their site. Do your due diligence and you will win long-term.
7. Check the investment options you got according to your risk profile – Not all investment instruments are for you. It should be suitable to your needs and aligned with your goals. It might be urgent but it is important to see all the options first to make proper decision. When you cannot explain the investment that you would like to enter you may be scammed.
8. Career planning– There is a study that Millennials (1980-2009) is the generation of hoppers. Most of us can’t stay in a job for more than 10 years compare to the Baby boomers and Gen X. Remember that there will be a lot of seasons in your career. Make sure you are totally prepared for the change.
Quadrant III is for time pressured distractions. They are not really important, but you badly want it now.
1. Buying the newest gadgets, HD TV using a credit card – Many people fall into this trapof consumerism. Newest iPhone, Samsung or latest gadget is the vices of this generation, but this is just a distraction. Not really important. The kid inside you is being unchained especially when you see the 0% using the credit card installment. Dave Ramsey said “if you can’t buy it in cash, you cannot afford it.”
2. Buying a vehicle for the sake of status quo – You think that wants and needs are the same. Big no! Buying a car that will help you to minimize your cost is good but remember if you bought a car because you think it is cool to have one is a worst idea, it will derail your finances. Your savings and investment with no additional cash flow won’t be sustainable to achieve your goals.
3. Buying a condominium or a house without a plan – 30 years of payment terms is good but 15 years or 10 years payment is way better because of the fees, but before you buy you should ask some questions like is this really important or can you just deprioritize it for another year. Planning should help you determine this. Refer to Q1 and Q2.
4. Buying an item that will just pile up on your place. Have you ever bought a lot of shoes, books, and things that you don’t really need but you think you will need it someday? You are a victim too of “I like this” mentality. It reminds us of our inner child. We buy something using our emotions and justify it with logical reasons.
Quadrant IV is for those activities that yield little or less value. These are activities that are often used for taking a break from time pressured and important activities.
1. Watching TV series for too long. – Anything that kills your time is not a worthy activity. Too much is not good at all.
2. Addicted to online and phone games. Many are guilty with this and being addicted means someone can control you, not you controlling them.
3. Sleep more than 12 hours a day. When you sleep it lets your body to recover but if you hibernate like those polar bears then you are wasting your time and that is counter productive. If you want to be successful you need to be a doer not just a dreamer.
4. Going to Starbucks as the extension of my home– When you spend time in Starbucks or Coffee bean you tend to fall in to the “latte expenses”. If you will compute everything that you spend just for coffee. You will hate yourself with the realization of you put all those money down the drain.
5. Facebook for more than an hour just checking the news feed– The social media is a good tool in marketing. If you are a digital marketer or you’re building your brand that creates revenue for you. Spending time with it for too long waiting for your friends latest posts is disrespecting your time. You cannot regain time which results to money lost.
David Isaiah Angway was a former fraud specialist and a Registered Financial Planner who currently helps young, urban and educated millennial (Gen Y) set and achieve their long-term financial goals by educating them about investments, asset allocation, risk management, retirement planning, and estate planning. His role as a financial planner is to find ways to increase the client’s net worth and help the client accomplish all of his/her financial objectives.
Diagram Source: Steven Covey, A. Roger Merrill, and Rebecca R. Merrill, First Things First (New York: Simon and Shuster, 1994), 37; James Cooper, “3 Vital Time Management Principles for Small Business Owners & Entrepreneurs,” mimosa PLANET, December 2, 2010, accessed February 4, 2012,