“What is important is seldom urgent and what is urgent is seldom important.” – Dwight Eisenhower
One of my favorite mental tools for organizing my to-do list is a simple strategy I learned from Stephen Covey. Basically, everything you need to do or might want to do in life can be organized by two questions: is it urgent or not, and is it important or not.
One way to look at this is by simply drawing two lines across the center of a page, one horizontal and one vertical, so that they cross in the middle and create four boxes, one upper left, one upper right, one lower left, and one lower right.
The upper left corner, which I’ll call “quadrant one,” contains things that are both urgent and important. Think of a huge work task that needs to be done by 5 PM today. They’re the top priority things.
The upper right corner, which I’ll call “quadrant two,” contains things that are urgent but not important. Think of many of the emails sitting in your inbox or notifications on your phone. They’re demanding your attention now, but aren’t really that important.
The lower left corner, which I’ll call “quadrant three,” contains things that are important but not urgent. Think of stopping by the HR office at your workplace to change your 401(k) settings. These things really need to get done eventually, but no one’s demanding that they be done right away.
The lower right corner, which I’ll call “quadrant four,” contains things that are neither important nor urgent. Think of dealing with a pile of old mail. Maybe you should do it someday, but it’s not vital and it’s not shouting at you to get done.
I often use this method for figuring out which tasks need to get done. What I’ve really figured out over the years is that the most important piece of using this for figuring out what to do today is to figure out what goes in quadrant two (urgent but not important) and quadrant three (important but not urgent) and utterly prioritizing the quadrant three stuff over the quadrant two stuff. Prioritizing important-but-not-urgent tasks over urgent-but-not-important tasks is hard because those important-but-not-urgent tasks aren’t shouting at you to get done, but the urgent-but-not-important tasks are yelling at you even though they’re really less important.
The “Eisenhower box” is merely doing this on a physical sheet of paper, drawing out the four quadrants and putting everything on your to-do list into one of those four, then doing the “urgent-and-important” stuff first, then the “important-but-not-urgent” stuff before bothering with the “urgent-but-not-important” stuff. It is really helpful when you’ve got a lot of stuff on your plate.
Here’s the interesting part: you can use almost this exact method to help prioritize your spending and figure out what “fat” you can cut from your spending going forward so you can achieve your financial goals.
Sit down with your credit card bill and a blank sheet of paper. Divide that paper into four quadrants by drawing a vertical line down the middle and a horizontal line across the middle.
In the top left one, write “Important and Urgent” and underline it. Write “Urgent but Not Important” in the top right one and underline it. Then do the same with “Important but Not Urgent” in the lower left and “Not Urgent or Important” in the lower right.
Then, go through everything in your credit card statement. For each one, ask yourself two questions.
Was this purchase urgent? Meaning, could you have easily waited to make this purchase? Was there a real need to make that purchase at the exact moment you made it, or could you have waited a day or two?
Was this purchase important? Was it something you truly needed? Was it something that is going to improve your life in any lasting real way? Is that purchase truly in line with a primary life goal?
Be honest with those questions, and the answers will tell you which quadrant that expense should go into. Just write it down in that quadrant, with just enough detail to recall what it is, then move onto the next item on your credit card bill.
For example, I might look at my credit card bill and see a few entries like this:
$30 at the local game store for a new board game that was on sale
$70 at the local discount grocery store for groceries
$6 at the convenience store for a snack
$210 at the county courthouse for annual vehicle registration
The new board game would probably go straight into the “urgent but not important” quadrant. It was a sale, making it urgent, but it was a completely unplanned purchase for a game I’m not even sure that I wanted.
The groceries would probably go into the “important and urgent” category, as we need food to eat and the stuff I buy at the discount grocer is usually very low priced. These are food staples.
The convenience store snack was clearly “neither important nor urgent.” I had the munchies and bought something I certainly didn’t need. It was just meeting a fleeting craving and there was nothing else special about that moment, the definition of neither important nor urgent.
The annual vehicle registration would definitely be “important but not urgent.” Nothing in my life would be immediately problematic if I waited until the due date to pay it, or even past the due date for a while into the grace period. Even beyond that, it’s likely things would be fine. Eventually, though, it would need to be paid or else I’d be facing a serious fine should I be pulled over – it’s an important expense but not one that needs to be paid immediately.
In the end, you’ll have a lot of stuff written on your sheet. There will probably be some things in each quadrant.
Going forward, you can completely dump everything written in the lower right quadrant, the not important or urgent stuff. All of that is a waste of your money and life energy. If you did get minimal value out of it, that value could obviously be much greater with a different purchase. For example, I really don’t need to ever stop at the convenience store for a snack. I don’t need to buy a cup at the coffee kiosk at Target. It’s all fleeting junk that’s a waste of money and life energy once you get beyond filling a short term craving.
Similarly, you can dump most things in the upper right quadrant as well, the urgent but not important stuff. Not everything there should vanish – there are things in there that were perhaps a bit of healthy spontaneity – but it should be a reminder that a lot of spontaneity ends up not doing anything for you in the long run. Those expenses should remind you that some spontaneity is good, but a lot of it is pretty useless, just a little momentary burst of fun that fades and leaves you right back where you started. I didn’t need that board game, although I did spend a lot less on it than I could have. It’s not wholly regrettable, but largely so.
The expenses that should remain in your life are the ones on the left, with maybe just an item or two from the upper right. That’s the important stuff, the stuff that matters, the stuff that sustains your life and makes it worthwhile. All of the rest is stuff you can discard going forward.
You can use this experiment as a tool to help you hone in on what’s important to you and which expenses, going forward, you can cut out or minimize to stay on focus with what’s important to you. This isn’t a tool for correcting the mistakes of the past, but to guide you to better decisions going forward.
It’s worth nothing that no one is perfect at this. We all have expenses that are in the “not important” quadrants. The goal shouldn’t be perfection, but to be better than before. The goal shouldn’t be zero expenses in those two quadrants, but fewer expenses going forward with a steady decline over time.
This all adds up to a healthy direction for your financial future, where your spending is directly in line with the things most important to you. The simple act of reflection, using the Eisenhower box method, is a really powerful tool for honing that spending instinct.