5 Tips how to manage your time (and budget) now

These are tough times. The world is on lock-down. People are losing jobs or are getting pay-cuts. And the probably worst thing of all is that we don’t know when this is going to end. Therefore, now more than ever, it is important to manage the money we have in the most cautious and structured way possible. Frugal living and strict budgeting can’t be a hobby now. It’s a must. So here we go, 5 things that you should consider doing today to navigate your finances and your well-being through these difficult times.

black calculator near ballpoint pen on white printed paper

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1. Review your essential spendings

If you never had a personal budget, now is a great time to start. A personal budget plan sounds complicated, but it’s really a simple calculation of income and expenses. The more details you put into it, the more aware you will be about your essential and non-essential spendings. In a situation like now, this information is vital to make smart money decisions.

What do I mean by “essential” spendings? We are talking about survival here. So it’s the 3 basics: Shelter, food and health. Your rent, including electricity, water, and internet. Your spendings on food and drinking water. And your expenses to maintain your health.

Every non-essential spendings need to be put under review and you should consider cutting or minimizing them.

2. Plan ahead with weekly limits on your expenses

After having reviewed your budget, you will know the amount of cash that you have (or that will be available for spending), and how much you need to spend for your essentials. Now plan ahead and split your cash and/or income in a way to keep your essentials going for as long as possible. I guess it’s safe to say that the goal should be to try to sustain your expenses for up to 6 months.

Any remaining cash should be split into equal weekly amounts for the same total period of 6 months. Putting a strong limitation on your weekly spendings is a good way to ensure that you don’t overspend and keep track of your budget.

When I was a student and had hardly any money to live on, I had a very simple system which I still recommend: Withdraw cash for a month ahead for your spendings, divide it in 4, and put each amount in a separate envelope. Each one envelope is for each week of the month, and no matter what happens, be strict with yourself not to open any of the envelopes ahead of time. This method will greatly keep you aware of the money you have and what you can or cannot afford.

3. Get your family on-board

This point doesn’t apply for singles, but for anyone living with a family, this is a crucial one. The whole family needs to be on-board with this. It won’t help if you set up the most delicate and strict plan for yourself while your partner is clueless and keeps on living as if nothing would have changed.

If you have kids, this is a great time to teach them about the value of money. They might cry if they don’t get a toy or some ice-cream, but they will remember this as a “tough” time when the family had to stay strong together. Chances are that you will emerge from this stronger as a family. And it’s never too early to teach kids about the value of money. Trust me, the school won’t do it for you.

4. Consider a side-gig

Financial advisors are preaching to their customers the necessity of having an emergency fund, which should cover at least 6 months’ worth of expenses. The reason that this topic is coming up so often is that there are so few people who actually do it. And to be fair, even most companies don’t follow suit. Just take a look at the world right now: As our economies come to a halt, after only one or two months of missed revenues, millions of restaurants, hotels and even airlines are declaring bankruptcies or are in need of bailout money. They clearly didn’t have any emergency funds whatsoever.

So in case, if you are late on this and can’t see a way to make your finances work over the next 3-6 months, you might have no choice but to consider a side gig. The good news is that if you are reading this, it means that you have a working internet connection, and luckily, there are millions of jobs available online.

Check-out online freelance jobs through platforms like “UpWork” or “Fiverr” which may have jobs matching your skillset. But even if your skills are from completely different fields, consider teaching/tutoring English (or what else you speak), doing transcriptions or translations. There are lots of opportunities out there.

These jobs will hardly make you rich, but they can be of great support to prop up your finances and to get you through this difficult time. Another positive aspect of having a job will be that you won’t go mad while sitting at home doing nothing.

Last but not least, there is a good chance that you might end up keeping your side gig even when this crisis will be over and we get back to our regular lives.

5. Don’t slack off

And finally, no matter how long this may go, I recommend that you don’t slack off. You might relax a little for a week or two, but after that, get a routine in place. You don’t need to wake up at 6 AM, but you shouldn’t sleep until noon either.

Set a proper routine when you wake up, take a shower, shave, have breakfast, dress properly. Then work on your side gig, perhaps study a little bit. Coursera, EdX, and Udemy offer plenty of opportunities to learn some new things for free these days.

Having set times for breakfast, lunch and dinner is good for your inner clock. Set some time aside to exercise at home. Body-weight workouts are a great alternative to the gym. Any other hobbies you may have will keep your body and mind sharp and ready to get back on track immediately when all of this is over.

Depending on work is not a smart long-term plan

I don’t remember whether my parents were asking me about my aspirations when I was young. I also don’t remember hearing them talking to neighbours, friends or family about what I am going to do when I grow up. They never really tried to push any particular profession on me. Maybe because they wanted me to discover the world on my own. Or maybe because as a kid I was not easy to talk to.

We went to school, learned all the basics that were considered important to find our passions, to figure out our talents, sharpen some skills, and to give us a hint of a direction towards some of the opportunities that were out there for us.

What nobody talked about were the things that would stand in our way. The things that would hinder us to develop, hinder us to grow, hinder us to follow our passions and hinder us to truly try to discover our full potential.

To some part, I understand. I wouldn’t believe anyone who would tell me that there was a very high probability to end up doing a job that I might not really care about, for people I might never get to know, to receive some money that will be just enough to cover my living expenses. Mundane tasks day in and out, without passion and without any true commitment, just to get through the day.

This is what we call the rat race and a reality for so many people in the world.

Everything has a price-tag

The grown-ups give us a lot of hope when we are young. They tell us that we can be anything we want. Do whatever we want. And achieve whatever is possible. In reality, it’s all not that simple.

Once we move out from home and leave the protective roof of our parents home and their care, reality quickly kicks in. We need money. Money to pay the rent, groceries, utilities, to go out, to travel. Everything in this world has a price tag on.

So whether you want it or not, you have to start to work. And the moment you get your first job, you enter the rat race. We all got to make a living and yes, living has a price to it. Shelter, food and health. These are the basics and to secure them one needs money.

The bad news is that as long as our financial system exists in its current form, these price-tags will never go away. They just grow larger. With inflation always present, you will experience that over your lifetime prices for everything around you double and triple.

It always starts with trading time for money

I started when I was 14 years old. My parents couldn’t pay me too much pocket money and sometimes cash would be short even for the simplest basics like new shoes or a jacket. So I just found a job to be able to afford what I wanted and needed. I started filling up shelves in a grocery store.

From there on, I would sacrifice every Saturday for it. 6-8 hours every Saturday morning, putting milk cartons into the shelves, sorting frozen pizzas, yoghurts, re-fill soda bottles and occasionally guiding some customers through the store. My salary was something around 6 EUR per hour if I remember correctly. I would earn 36-48 Euros for each Saturday, being paid-out in cash by the end of each week. A huge improvement to the 5-10 EUR that I would get from my parents per week.

This is how I learned to trade time for money. When I needed money, I went to work. When Saturdays earnings were not enough, I would free up an afternoon during the week and work one more day after school. Suddenly I could afford to buy new shoes, to get rid of my glasses and buy contact lenses. I had money to spend when hanging out with my friends. It seemed to be a great concept.

What I obviously didn’t think about at that time was that at some point in my life I would have to pay the rent on my own. Utilities, food, to have my own medical insurance. I didn’t think about how many hours I would need to spend in that grocery store to be able to afford all of it.

Depending on money is killing your opportunities to grow

When you grow up, before you even know it, you start trading most of your time for money. Regular work contracts in Europe have something around 35 working hours per week on them. In Asia, it’s around 48. And more than often, this one job is just enough to secure the previously mentioned basics: Shelter, food and health.

Those who want to be able to get a little more out of life start taking part-time jobs, freelance online and adding up hours of work. This is what they know, what they learned. To trade time for money. But as more and more of their time is being traded out for cash, their opportunities in other areas shrink with every traded minute. Learning new skills, discovering new passions, spending time with their loved ones. The time to do those things disappears with every traded hour. Minute by minute.

How long can you work

And the big question is, how long can you actually do this? What will happen when you get old? Will your social security be enough to live on? What if you get sick? Handicapped? When your mental ability goes down?

And how about all those things you always wanted to do in life? Going for a trip around the world, feel some wanderlust in the Swiss Alps, climbing in the Himalayas, snorkelling in Thailand, drinking Mojitos in Cuba or visiting the Empire State Building? Do you think that you will be able to pursue your dreams once you left the workforce?

We are not smart enough to consider all those things when we are young. I wasn’t smart enough then to think about the next logical step when I started to work in the grocery store. But as we get older and develop a deeper sense of logic, we certainly should be smart enough to put it into consideration, shouldn’t we?

Working is not bad – depending on work is

There is of course another way. A way to develop passive income and to stop being dependent on any job. This does not mean to stop working. Absolutely not. I can’t imagine a life without work. I want to do something. I want to work.

But I don’t want to worry about money.
I don’t want to have to work for money.
I don’t want to depend on work for money.

Those whose minds are trapped in the system won’t understand this idea. How could they? They never learned anything else. But, what if we could work for our passions, our beliefs, our aspirations and our dreams? Wouldn’t it just be something else entirely?

FIRE is all about that. About freeing up your time, your mind and your passions. Because once you reached financial independence, you can focus on things that will truly matter to you. Isn’t this a goal worth striving for?

Trading money for time

We all know what it means to trade time for money. We call it “work”. We spend our time to perform some kind of function and receive money for it. Daily, weekly, monthly. Year in and year out.

Most people get so used to it and take it that much for granted, that they seldom try to think the other way round. Trading money for time.

Trading money for time is not any new concept or idea. Most of us do it all the time without thinking about it. When we grab a coffee at Starbucks, it’s not that we just buy a coffee. In fact, we leave our money in the coffee shop for someone to take the time to prepare and serve us a coffee. When we buy a car, we pay money to save us time and effort for travelling around. When we buy groceries in a supermarket, we actually pay money not only for the goods but also for the supermarket to have arranged us a one-stop-place where we can conveniently pick up all we need in one shoot.

So if you understand the concept, you will realize and it will make sense to you that this system can be extended much further. It rationally explains, that the more money you have to trade, the more tasks you can allocate to it and get some time back.

It makes sense – especially if you got big plans

Wealthy people understand this concept perfectly, and those among us who have big plans, big ideas, and by far not enough time to tackle it all, those are the ones who should utilize it the most.

If you are an entrepreneur and want to build up a new company. If you are passionate, dedicated and can’t think of anything else but how to make your dreams come true. Wouldn’t it be a great help if you wouldn’t need to think about all those nasty daily things that one needs to do to get through the day?

Grocery shopping, cooking, cleaning the house, taking your car to the car-wash, mowing the lawn, taking care of your taxes, manage your investments, … if you could get the time back for all those routines and use it to focus on the things that matter most to you, wouldn’t that be great?

It’s not about prestige or being lazy 

People who don’t understand the concept and its value might misinterpret the idea of hiring people for those daily routines. They might think that “that rich guy is just too lazy to do the work”.

But having a housekeeper, a nanny, a gardener, a financial advisor, or a driver… for many wealthy people out there this is not about showing off to the world that they can afford it. It’s about getting back what they value the most. Time.

There is also a financial aspect to it. If you earn 100$ per hour, spending 2 hours to go grocery shopping and cooking is equal to 200$ lost. If you hire someone for 15$ per hours to do it for you, it would mean that you spend 30$ to get these tasks done, while in the meantime you have the opportunity to earn 200$. This comes down to a profit of 170$. If you see it from this point of view, then you stop thinking about why “the rich guy does it” and start thinking about why you don’t.

Time is our most precious asset

As the title of this blog goes, it’s not about money, but about time. Time is our most precious asset and the sooner this concept is understood, the sooner the concept of FIRE receives the understanding and appreciation that it deserves.

The Journey Begins

Now, this is not my first blog. I was writing in the past about travel, about studying in South Korea, working in China, and some of my experiences of working in Scotland. But this journey is a different one. This journey is about me finding…. a slice of… freedom.

Depending on who you will ask, freedom can have a very different meaning. To some, it’s about the place they like to live. For others, it’s about the choice of what kind of job or career they like to follow. But for me, it’s about financial independence.

The concept of success

I have worked as long as I can remember. I got my first job was when I was 14 years old, filling up shelves in a grocery store. My parents didn’t have the best start when we moved to Germany and as a teenager, I needed to take care of many things by myself. Basically, anything that would have been something else but food or shelter.

Over the years I mastered the art of finding work. I moved out from my parents when I was 20 and was on my own feet ever since. My studies, my travels. I worked. I took care of myself.

To push things further, I have figured out the way to succeed in corporate life and managed to create a successful career in the hospitality industry for myself. In the last 10 years, I had a strong passion for my job, travelling the world, climbing up the career ladder, and doing my very best to find what I defined as success at that time.

Trading time for money

The way I saw it, I was working so hard to make my dreams come true. There was always the next dream. The next step. The next target. I had a lot of passion, and I was willingly trading my time for the prospect of getting what I wanted, and where I wanted it.

But recently, things started to change. My ideals, my dreams and my view of the world started to shift.

Whatever I did and wherever I worked, I always wanted to do things for the better. I would pull in all my energy, all my time and all my heart and passion into the task at hand. I always wanted to improve my surrounding, to help my company to succeed and to push up my colleagues together with me to the next level. I always asked myself this one thing. If I could do something better, why wouldn’t I? Why wouldn’t anyone?

This would always lead to more work. The more I wanted, the higher my aspirations would turn up, the more time I sacrificed for work.

Year on year I worked harder and harder. I dedicated myself completely to nothing else but to fulfil my dream of travelling and earning enough money to be able to support myself. Most of my friends, colleagues and even my family considered me a workaholic, but I didn’t see it that way. My point of view was best described by this quote:

“Working hard for something we don’t care about is called stress. Working hard for something we love is called passion.” – Simon Sinek

I am not 100% sure I like Simon Sinek but I like some of the things he says. If you don’t know him, check out his legendary talk about millennials on YouTube (here). It’s really good. I don’t agree with it on some points but he is a great motivational speaker for sure.

Anyway, so I was living my passion, I was working as hard and as much as I could. And without really thinking about or realizing it, I was trading my time for money.

Financial woes

Another thing that still got often in my way were financial worries. While I always managed to find my way and to not rely on others, I had some really hard times and financial challenges to overcome.

There were times when I would have more than three jobs at the same time, working overnights, working on weekends, just to make ends meet or to get to my next target. For the last few years, I was working often more than 80 hours per week. But I would still get sometimes in financial trouble.

I was turning 35, considered myself an adult and despite a successful career, I would still have money trouble every now and then. So questions started to come up in my head. How could I work on that? Where would I want to see myself when I turn 45? Or 55? How would I prepare myself for retirement? Was there any smarter way to get my finances in shape with the time that I had available?

The concept of FIRE

This is when I started to think about a change. I realized that putting all this effort for jobs which would disappoint me one after another, it would not lead me to anywhere. I realized that while I could earn more money if I put more time into it, the final result would be a tired and exhausted body and mind, loss of friends, limited time for family.

It became like a rat race and I realized that it was not sustainable. Worse, I started to hate the very idea of having to go through my entire life like this. How could people consider it normal to work like this up until they reach retirement age?

This is when I discovered the idea of financial independence and early retirement. The concept of FIRE.

FIRE covers two of the most important parts that I consider necessary to reach my ultimate goal.

  • To become financially independent
  • To stop trading time for money

So on this blog, you are going to read sometimes about ideas on managing your cost of living, career advise, about investing, about freelancing and the occasional “opinion” on things that I consider important to think about.

Feel free to comment, share and I hope you enjoy the read.