You can’t manage what you can’t measure. This is true of time too.

A time audit is an exercise in tracking your time to see what you spend it on, and how that matches with your values. Almost everyone feels like there is not enough time to go around. With a time audit report in front of you, you can make informed decisions about what to do about that.

I did this exercise last year as part of the leadership coaching program I am a part of. I used a spreadsheet, but at the time I thought this would be a perfect candidate for an iPhone app. About a month ago I decided to make the app.

So here it is. My Time Audit iPhone App. It beats the spreadsheet hands down.

Some people view frugality as inherently virtuous and valuable. This is a serious oversimplification. Sometimes spending less on something is a very bad idea. This applies to time as well as money.

The apple farmers from my last post will not benefit by spending less on new apple trees. How about a wheat farmer who decides to save money on seed by planting only half his land this year? Being frugal with investments (things that produce additional value over time) is counter-productive.

I see three major postures:

• Frugality says underspend on everything. This is not much fun now, and not much fun later.
• Consumerism says underspend on investment, overspend on consumption. This is fun now and painful later.
• The long-term view says underspend on consumption, overspend on investment. This is not much fun now, and fantastically rewarding later.

Remember I’m not just talking about money. Tools, infrastructure, learning, savings, system improvements, personal growth, and healthy relationships are some investments worth overspending on. Don’t be frugal with those things.

I think most people in wealthy countries are acting primarily on consumerism. They feel a little bad about this, sensing that it can’t be right somehow, so they add a layer of frugality to the whole thing. Frugal consumerism is a confused strategy resulting in very low investment in the long term. The U.S. personal savings rate (the portion of household income that is saved or invested) is around 4% these days, and came close to zero before the recession.

I suspect at the deepest level misplaced frugality springs from survival instinct. It’s a defensive posture. Why invest in the long term if short-term survival is (or feels) uncertain? For a squirrel, it makes sense to prioritize running away from predators above storing up nuts for winter. For a business, it makes sense to prioritize avoiding bankruptcy above long-term expansion plans. There’s a time and place for defensive postures. Survival really does matter.

If you are struggling to survive in your money or time management, focus intensely and immediately on what you can do to make changes to your life to create some breathing room. You must get out of crisis mode so you can start making decisions with a longer-term view.

However, if you are not about to be eaten by whatever eats squirrels, be generous, not frugal with your investment spending.

Caveat: There will always be more investment opportunities (for time, money, and relationships) than you can afford to invest in. Be generous in allocating resources toward investment, but choosy about what and who you invest in. More on that next post.

When you invest rather than consume there is a cumulative effect that can generate incredible momentum. This applies to all resources, including money, and especially time.

Contrast these fictional apple lovers.

Charlie Consumer spends a few hours each year working for a local apple farmer. In return the farmer gives him a bushel of apples. The first year he spends a few hours and gets a bushel of apples. The fifth year he spends a few hours and gets a bushel of apples. The thirtieth year he spends a few hours and gets a bushel of apples.

Ivan Investor spends a few hours each year working for the same farmer. In return the farmer gives him a young sapling apple tree that costs the same as a bushel of apples. Each year Ivan Investor plants the young apple tree he earned. The first year he spends a few hours and gets no apples. The fifth year you he spends a few hours and gets a few bushels of apples. The thirtieth year he spends a few hours and gets hundreds of bushels of apples.

(If you protest that apple trees require ongoing labor and care, note how the farmer that Charlie and Ivan worked for paid for that labor. It wasn’t with his time.)

Ivan produced this huge momentum because he invested his time in something that generated additional value over time. In this case it was tangible physical value, but it could just as easily be human, relational, or spiritual value. Generating the spare time to invest in the first year is the hardest part. (If Ivan needed to eat those apples to survive, he never would could have afforded to plant the first tree.)

Manage well to create room today to invest part of your time in things that generate additional value over time.

Time is the ultimate non-renewable resource. Everyone has a limited supply.

You will trade every hour of your time for something.

Just like money, time can be:

• wasted (traded for something of no value),
• consumed (traded for something that must lose its value in order to provide a benefit),
• or invested (traded for something that generates additional value over time).

Wasting time is foolish, but not easy to avoid. I think most serious time waste comes from deeper issues like fear and addiction. It also comes from a lack of awareness of opportunities to invest time in something greater.

Consuming time is unavoidable. We have to spend a lot of time sleeping, for example. Almost all of us must also spend a lot of time to earn money to have a roof to sleep under. This trading time for survival and a paycheck may be a fair deal, but it doesn’t come close to realizing the potential of a lifetime. Still, there’s no need to chafe about consumption. To even have the opportunity to invest time in things of lasting value, you must meet your survival needs first. The goal here is to be efficient, diligent, and strategic enough to do more than survive, to have some time left over for investment after the necessary consumption is covered.

Time can be invested. It can be traded for things that generate additional value over time. By investing your time effectively you can accomplish far more than you could ever do in a lifetime of trading your time for consumables.

Some Ways to Invest Time

• Invest time to plan with deliberate ends in mind. A few minutes or hours of wise planning can save days or years of wasted time.
• Invest time to build and improve systems for automating tasks when possible and delegating them when they can’t be effectively automated.
• Invest time to build relationships with people. Not only do most things get done through relationships, but we need them to survive, to be healthy, and to be effective.
• Invest time to change yourself. Grow your character abilities, like courage and human connectedness. Improve your skills, like communication, organization, or specialized job skills. Go to school. Go to therapy. Hours spent developing yourself can multiply your effectiveness for the rest of your life, adding decades worth of valuable accomplishments to your life.
• Invest time to change other people. Especially people who are young and/or in a position to influence multiple other people. (But be cautioned that changing others directly isn’t possible, you can only provide resources to those who are already in a position to use them.)
• Invest time to create things that didn’t exist before. Invent something, like a tool or a system or a concept or a work of art that somewhere between dozens and billions of people can use. A cure for a major disease, a book that changes how we think about life, or a better way to make paper clips. Improvements count too. There is power in creating.
• Invest time to lead other people. Leadership is possibly the most powerful way of all to leverage your time. If you lead an initiative that causes each person in the US to spend an average of 1 minute on your cause, those minutes will amount to about 8 of your entire life’s worth of minutes. That is leverage, and that kind of leadership happens all the time.

This is one of my favorite business school concepts. In a factory, if the goal is to produce as many units per day as possible, there will always be one machine, or step in the process, that is the slowest link in the chain. If the welding department can do 30 units an hour, but the painting department can only do 20 units an hour, then increasing the output of the welding department will not increase the output of the overall factory, because the painting department will constrain the output to 20 units an hour. The constrained resources is the bottleneck.

To increase overall output, you must increase the constrained resource, or change how you are using it. Increasing non-constrained resources may appear productive, but it won’t increase overall output.

This applies to everything, not just factories.

• In business, if the constrained resource is capital, you must increase capital or change how you are using it.
• In farming, if the constrained resource is acres of land, you must increase acreage or change how you are using it.
• In leadership, if the constrained resource is your time for strategic and visionary planning, you must increase time spent on that, or change how you are using it.
• Personally, if the constrained resource is courage, your must increase your courage or change how you are using it.

Other personal constraints are initiative, hope, relationships, training, etc. This is about a lot more than machines and money.

With every goal you pursue, you must know what your constrained resource is and focus your management efforts to mitigate that constraint.

At an individual, personal level the ultimate constrained resource is time. We each get 24 hours per day with a maximum limit of about 100 years (on earth). This is mankind’s greatest limitation, and therefore our most valuable resource. There’s no way to add more, so to increase the output of your life, the only choice is to change how you use your time.

It’s worth being very deliberate about what you trade your time for. Just like money, it can be wasted, spent, or multiplied by investing it. More on this soon.