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In the business world, managers spend a lot of time juggling resource allocation. Every company has a finite amount of resources — whether it be financial capital or human capital — to use and spend in order to achieve the company’s strategic goals. Effective allocation generates growth and success, while ineffective allocation results in loss and failure.
Stock market analysts often look to a company’s resource allocation to determine the health and direction of that business. It’s usually a better indicator than listening to what the company says are their long-term goals. Businessman Andy Grove put it this way: “To understand a company’s strategy, look at what they actually do rather than what they say they will do.”
How to Allocate Your Resources?
In his book How Will You Measure Your Life?, Harvard business professor Clay Christensen argues that individuals face the same challenges as businesses when it comes to wisely allocating resources. For us, our most precious resources are typically time and money. Each of us has several competing “departments” in our life (family, work, school, church, friends, etc.) vying for a slice of this limited pie.
Moreover, Christensen posits that a good way to evaluate what’s really important in our lives is to simply look at how we allocate our resources — just like a stock investor might look at a company’s financial data to determine whether it’s on sure footing. Follow the time and money trail and you’ll find what a man truly values, rather than simply what he says he values.
Imagine that an independent analyst opened the ledger book of your life and looked over reports detailing the way you spend your time and money. You tell the analyst that what you value most is your education, fitness, and spending time with your girlfriend. But what the analyst sees in your ledger book is this:
Time Spent in Given Week:
§ Surfing the internet: 22 hours
§ Work: 20 hours
§ Playing video games: 8 hours
§ Hanging out with your friends: 7 hours
§ Spending time with girlfriend: 6 hours
§ Studying for class: 3 hours
§ Working out: 3 hours
§ Reading for pleasure: 0 hours
What conclusion would an analyst draw about your core values or where you’re going with your life from this report? Would it show a man who makes his girlfriend, fitness, and education his top priorities? Or would it reveal a man who values video games, Doritos Locos, and Reddit memes the most?
I know it might seem a little clinical to look at every aspect of your life, even your personal relationships, in a purely data-driven, budgetary light. But I think examining your own methods of “resource allocation” is a useful way to measure whether you’re actually walking the walk when it comes to your core values or accomplishing your goals. It keeps you honest about the man you say you want to be, and the man you are. And it’s particularly useful in gauging your progress on goals that don’t offer immediate or concrete feedback, such as improving your relationship with your spouse or becoming a better leader.
Become the Boss of Your Life: How to Effectively Manage Your Personal Resources
So how do you start allocating your precious, limited resources to the departments in your life you most want to support and build? The following steps will put you in the corner office of life.
Step 1: Conduct an Audit of How You’re Currently Spending Your Resources
The first step in becoming a wise manager of your time and money is to open the ledger book of your life and do an audit of how you’re spending these valuable resources. Many companies go under because of sloppy or non-existent bookkeeping – the right hand doesn’t know what the left hand is doing.
Likewise, many men only have the faintest notion of how they’re really spending their money and time – and they may avoid taking a closer look at these numbers because ignorance shields them from a reality that might stir them to make difficult changes. But if you want to be the boss of your life, you need to be completely aware of how things are running in every department – which areas are blowing through the time and money you give with nothing to show for it, and where to transfer those funds to get the stock of your personal progress surging.
To gain this honest awareness, utilize the following tools to mine and record valuable data on how you’re spending your resources. Gather and record this data for two weeks.
Mint. Mint’s free online service takes all the hassle out of tracking your spending. When you sign up for Mint, you’ll be asked to connect all your financial accounts (checking, credit cards, loans, etc.) into their system. Once you have your financial accounts connected to Mint, just use your debit card as you normally would. Mint automatically tracks and categorizes your spending for you and every month it spits out a report showing how you’re spending your money. In one glance, you can see if you’re literally putting your money where your mouth is when it comes to your values and goals.
RescueTime. Most of us spend a good chunk of our time on our computers and the internet. Does the way we spend our time online reflect what we say our core values are? Find out with RescueTime. It is a paid service that allows you track how much time you spend on certain websites and even how long you use certain apps on your computer. You simply create an account, install the program on your computer, and RescueTime takes care of the rest. At the end of each week, you will receive an email report that gives you a breakdown of how and where you spent your time on your computer.
Time Tracker. Time Tracker is a free browser extension for both Firefox and Chrome browsers that measures how much time you spend on certain websites. Pretty simple.
§ Download Time Tracker for Firefox
§ Download Time Tracker for Chrome
Eternity Time Log. Tracking your time online is pretty easy and seamless thanks to the myriad of apps and browser extensions out there on the market. But what about the rest of your time? How do you easily track the number of minutes spent playing video games or hanging out
with your kids or exercising? Enter Eternity Time Log. It’s an app for your iPhone or iPad that allows you to quickly and easily track your time. Just start the timer whenever you begin a new activity, give it a tag, and let the app do the rest. At the end of the day or week, you can view a report of how you spent your time. Time Tracker for Android works similarly.
with your kids or exercising? Enter Eternity Time Log. It’s an app for your iPhone or iPad that allows you to quickly and easily track your time. Just start the timer whenever you begin a new activity, give it a tag, and let the app do the rest. At the end of the day or week, you can view a report of how you spent your time. Time Tracker for Android works similarly.
Pocket Notebook and Pen. A classic standby. Keep a pocket notebook and pen in your back pocket and write down any money you spend during the day and how much time you devote to all your activities. Sure, it’s not as seamless as the digital life trackers, but it gets the job done.
Step 2: Create Goals for How You Want to Better Utilize Your Resources
Once you’ve taken an inventory of how you use your time and money, look over the results. Ask yourself what a stranger who examined the data would conclude about what things you value most.
Just like a business, we need to be intentional with how we distribute our limited resources. If we’re not, we risk slipping into “default mode” which usually is the path of least resistance – a weed-ridden, overgrown path that leads to minimal personal growth and stagnation. That’s why it’s so important to purposely allocate our resources so that they line up with our values and long-term goals.
If your current spending (money and time) doesn’t reflect your ideal, start making concrete, intentional goals so that reality better matches your desires.
First, make a list of the things that are most important to you. Keep it short! As business professor and bestselling author Jim Collins puts it, “If you have more than three priorities, you don’t have any.” You can, however, come up with three top priorities for your work life, and three for your personal life.
Once you’ve written down your top priorities, decide how much of your time or money you want to allocate to each. With budgeting your money, this is pretty straightforward. When it comes to budgeting your time, however, there are a few different ways to go about it. For example, you can set an hours-per-day goal, or an hours-per-week goal. So if working on a side hustle is important to you, make a goal to spend five hours on it every week. If cultivating your spirituality is a top priority, make it a goal to spend 20 minutes a day studying your scriptures.
You can also decide to track your time spent on different activities as a percentage of your overall time. Earlier in his life, Collins made it a goal to spend 50 percent of his workdays on creative pursuits like research and writing books, 30 percent on teaching-related activities, and 20 percent on all the other things he has to do. Ever since then, he has kept a running tally of how closely his work life has followed these percentage goals.
Step 3: Diligently Keep Track of How You’re Allocating Your Resources
As you set these new goals to recommit your time and money to what you truly value in life, understand that allocating your resources isn’t a one-time deal. Without diligent tracking, you’ll head right back into the default position, and once again find yourself meandering down the path of least resistance.
Keep on using the tools we laid out in the audit section to regularly track your progress and how close or far you are from the goals you set for yourself. Collins keeps a stopwatch with three different timers in his pocket and carries it with him wherever he goes. Once he begins a work-related activity, he starts the timer that corresponds to the category the task falls into (creative/teaching/other). When he switches to a task in a different category, he stops the timer that’s been running, and starts the one that corresponds with the work he’s now doing. From time to time, he logs this data into a spreadsheet in order to update his running totals on how successful he’s been in dividing up his workday according to his goals.
You obviously don’t have to be this exacting, but do figure out some tracking system that will keep you headed where you want to go.
Step 4: Say NO to Things That Will Sap Your Resources
Beyond diligent tracking of your progress, the biggest thing that will help you stick with your resource allocation goals is learning to say no, and keeping your life as simple as possible. In the business world, this means running a lean, nimble, operation with minimal overhead. In your personal life, it means separating the good from the best, and refusing to take on responsibilities that aren’t in line with your values and goals, even when saying no makes you feel guilty. And it means jettisoning the material possessions that require upkeep and maintenance – the “stuff” in your life that drains your resources away from the departments in your life that mean much more.
In your world, small is beautiful too. When it comes to keeping your life simple and getting rid of your crap, “downsizing” is a truly positive thing. Hand your money and time wasters the pink slip, in order to create a truly blue chip life.
