How much time do you spend managing money?

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Managing money 10

Here are some interesting stats for you:

 

- Average American spends 3 hours/day watching TV for a grand total of 90 hours/month

- Using your mobile device comes at 30 hours/month - talking, texting, playing games, etc.

- We spend 13 hours/month playing video games (obviously this number is much higher for younger people though some seniors might be addicted to Tetris, you never know).

- Exercising only takes around 9 hours/month for most people

- We socialize for almost 20 hours/month (including online and in person)

Rest of the time we spend working, sleeping, and eating. I could not find studies showing how much time we spend standing in front of the fridge pondering about food (at least 4 hours in my case) or arguing with your spouse whose turn it is to take the garbage out (none in our family - it’s ALWAYS me).

 

Managing money

Managing money

 

 

What the study doesn’t show though is how much time an average person spends on managing money.

 

But let’s put these numbers into perspective. What is more likely to affect future for yourself and your family?

Is it the way you manage your money or how the latest season of Walking Dead ends? Is it the financial health of your family or yet another cat video on YouTube?

It only seems logical to me that we should be putting our efforts and attention towards something that will impact us the most. If you manage your finances properly, you will eliminate great chunk of stress in your life. You will avoid conflicts with your spouse. You’ll be able to afford to spend quality time with your kids. Heck, you might even retire decades ahead of schedule. Can cat videos on YouTube or latest Battlefield video game do the same for you? Probably not (unless you have the next Grumpy Cat and willing to pimp it out for some sweet moolah). So, what should come first then?

 

It doesn’t take THAT much time

 

So, I’ve decided to track the time I spend managing money. For the purpose of this “study”, I’ve kept track of everything I do that is in any way connected to managing finances for my family. I’ve tried to account for all activities and figure out how much time I spend on them on any given month:

- Checking account balances and categorizing transactions in Mint - 8 minutes/day or 3.3 hours/month.

- Budgeting for the month ahead - 30 minutes/month. This task is somewhat automatic by now as our budget doesn’t change much month-to-month.

- Paying bills and investing - 1 hour/month. Most of our bills are on autopilot, and require very little attention. Investing is also very simplified as it consists of buying a handful of ETF funds through online brokerage.

- Meeting with financial advisor - 30 minutes/month

- Education - 1 hour/day or 30 hours/month. This includes listening to personal finance podcasts, reading blogs, and an occasional book or two.

 

Grand total: 35.3 hours/month spent on money-related activities or only 5 hours on managing money.

 

Granted, we don’t make a lot of money. Our combined income hovers around average income for a Canadian household. I’d imagine higher income would require more time to manage your finances.

At the same time, our personal finances are simplified which makes it very easy to manage. If you have more than 2 bank accounts, consider closing extra ones and consolidating. I’ve done it for our family, and not only it saves serious money on bank account fees, but it requires less time to manage and makes everything more efficient.

 

How much time do you spend on managing money?

 

  • Kevin

    Glad you are back after a long hiatus from the blogosphere. Truly enjoy your thoughts. Nice to know a couple can find a financial common ground like you and the Mrs have, as me and my wife are eerily similar to you two.

    We have made our fair share of questionable financial moves in our short time together (new car, vacation on credit, etc) but are fortunate enough to have a combined income that forgives a lot of our errors. Your style of writing has opened up an avenue to allow us to talk more freely about our finances and goals. So thank you.

    Also, your new years blog introduced me to the “budgets are sexy” blog. It spoke briefly about the best financial plan not necessarily being the best. The best plan is the one both parties are passionate about. We used to disagree about me investing a small amount for retirement, but she is more than willing to put a lot into paying down the mortgage. Purely looking at rates, its not the best option, but it has impassioned her so much more to watch the mortgage get smaller than the RRSP get bigger. Both are getting us closer to financial freedom! Perhaps you could expand on that in your own way so we can explore more ways to move forward in a positive direction.

    Thanks.

    • Financial Underdog

      Hey Kevin,

      Thank you for commenting!

      Here’s what I’ve learned about financial plans in general. There are literally hundreds of approaches, some of them are good, and some are questionable in my mind.

      But what is the best approach? Personally, I think the best plan is the one that you’ll be able to stick to. Here’s a quick example - I do work out on a somewhat regular basis. When I first joined the gym, I worked out a whole program for myself of exercises I`d like to hit when I go to the gym. I literally came up with 14 exercises, and tried to fit it all into a single visit. Huge fail because I`d get dead tired and would be discouraged from going to the gym for an entire week; then I`d feel guilty that I didn`t go. ; Then I`d try to do it all over again - basically a giant self-repeating cycle of misery. But a friend of mine said - why don`t you just do 3-4 exercises but go more often? It made a huge difference, and although I do the same volume of physical activity, my morale is way up because the plan actually fits me personally - more often, less effort, just a quick 1 hour visit to the gym instead of a giant effort once a week. So what is the best routine for me? The one I’ll be able to stick to and still feel passionate enough about.

      As far as paying down your mortgage vs. investing - same thing, different people feel differently. From the numbers point of view, it makes more sense to invest money instead of throwing it towards mortgage simply because the projected returns are higher than your mortgage rate. But mentally, paying down the mortgage has huge benefits as well because you feel more secure about your future. I’d imagine having no mortgage feels fantastic - your cash flow is awesome because you’re not spending money, and you feel secure - world market can be in a dive, but you have your own paid off house for your family to live, your own cave that won’t go anywhere no matter how bad the markets get.

      Personally, I’d try to do both. Both of you are leaning towards different approaches, but want good things for your family. So, I would come up with a compromise. Instead of insisting on investing because it has bigger possibilities, I’d come up with a way to do both. For example, work out percentages of your income going towards investing and a percentage going towards paying down your mortgage (extra payments, lump sum, etc.). This way both of you see the plan working for the benefit of what’s important to you without only going one way. And I think this way both of you will feel good about it. And it doesn’t have to be huge percentages right away, you can start small and increase them as your income grows (or your free cash flow grows).

      Us personally, we do exactly that. A portion of our income goes towards investing, and we also been increasing our mortgage payments every year to pay it down quicker. We’ve started small on both ends, but gradually been increasing our efforts on both ends. My wife feels more passionate about the possibility of a paid off home too - I think women’s DNA has a special “security gene”. I’m more of a numbers guy, and I like investing. But just like family dinners, you have to compromise and come up with something that works for both of you.

      Hope this helps. Oh, and on a side note, congrats on actually having these conversations with your wife about money. You’ll be surprised at how many people avoid talking about it until something major happens.

      Thanks again for reading!

  • I spent countless hours managing my money a month but the people around me spend close to nothing. I find it crazy that people dont spend any time to manage their finances since the world revolves around it.

    Everything is secondary for me. Although mad men and game of thrones is starting up soon lol.

    • Financial Underdog

      I can see it being an almost full time job, AG.

  • As someone who has a well established spreadsheet, I don’t spend more than 30mins per week checking it, paying bills, organizing our money BUT in the beginning it took forever and it was frustrating and I wanted to give up a bunch of times in the early days it’s tough and people give up!

    • Financial Underdog

      Yes, it’s a bit of a investment of time - to figure our the system and get used to it. But once you know what’s up - it’s easy.

  • Interesting breakdown, have to agree that the average people spend way too little time on managing their money. If we all spend more time managing on our money, perhaps less people will face high consumer debt.

    • Financial Underdog

      Some dividend paying stocks of Canadian banks might become less profitable though 😉

  • Fun, I might have to give this a go! It’s probably really only about an hour a month, maybe 2 at most is my guess.

    • Financial Underdog

      Nice! Sounds like you got everything under control 🙂