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Anyone who has ever read about time management will be familiar with the Time Matrix. You know, the one which is segmented to identify Urgent v Important, and looks like this.

TM Matrix

Have you ever thought how applying this same Matrix to your financial habits might just make you more wealthy?

Think about it. You have a spending pattern. There are things you like to buy, things you have to buy, things that you want to buy but can’t – a whole range of purchasing options based on the same two criteria you use when spending ‘time’.

There are Quadrant 3 things – you ‘want’ it now and so you buy it ‘now’, even though a sober reflection may have said it wasn’t important enough to spend hard-earned cash on, but you (or someone you love/like/respect) suggested it was NOW or never.

There are Quadrant 1 things – things you genuinely have to buy now because they are vital to something in which you are presently involved. For example, I recently had to buy longer screws to fit a light switch that stuck out just too far for the provided screws to reach the fitment. (I know it’s an off example but read on.)

There are Quadrant 4 things – things that aren’t urgent or important but your heart overrules your head and you buy it because it’s pretty or funny or quirky or you’re just so fed up you need to demonstrate your personal power by possessing this bauble.

And there are Quadrant 2 things – things which aren’t necessarily urgent but which are, or may be, urgent now or in the future. Back to my screws. I needed 50mm screws, but could only get 75mm screws, which, it turned out, were far too long. I therefore had a Q1 need for a pair of pliers strong enough to cut the screws to length. Looking around, I realised that I anticipated a need to cut even bigger metal rods, so I bought bolt-cutters, instead. And that made me realise that notwithstanding the urgency of the screws, now would be a good time to make an anticipatory spend on a toolkit and, being Christmas, there were many good kits available at a discount price. The bolt-cutters were Q1, but the extra purchase was Q2.

What else can we allocate to these Quadrants?

Q1 – unexpected fines/bills, repairs to broken electronics, fuel for an empty tank, fast food when we’re hungry.

Q3 – tips for surly waiters, money for chuggers (charity muggers).

Q4 – extra SkyTV channels, that emergency pasty fat people buy at 9AM, our expensive Starbucks coffee to carry to work – the one that we worked 20 minutes to afford, a copy of OK magazine.

Q2 – fuel for the car before we run short, household bills, a 30th anniversary copy of The Seven Habits (I am genuinely excited), good food, investments and savings, tithing if that’s what you do, etc.

Where do you spend most of your money?

Don’t worry about it to stress-point. As with time, occasionally what looks like a Q4 spend is, in fact, a Q2 spend if we genuinely need something to de-stress ourselves, for example. A Q3 spend on a friend may hurt but may pay dividends in terms of that friend’s realisation that they are loved, making it Q2, or even Q1 spend.

Have a think – do you have foreign holidays because other people do, when you could spend the same on personal development? Do you have a plan to buy a new car on a monthly rental when buying an old one outright could leave you with money you could invest, and an asset to sell if you wanted to?

The Time Matrix – a way to save money. Who’d have thought it?