A few months ago I wrote a post on personal analytics. There I discussed how more and more people make their life decisions based on numbers. They don’t make their decisions based on what they feel but based on facts. This way their decisions are well-informed and based on strong foundations.
How can we apply personal analytics to our lives? The key is to track your life metrics. Only by tracking them can you get the numbers upon which to make informed decisions.
Unfortunately, the tracking process is still mostly manual these days (with a few exceptions like Nike+ that can automatically track your running speed and distance). Because of that, if you track too many metrics you risk spending too much time on the tracking process at the expense of doing real work.
So the best thing to do is to track just a few important metrics. This way you can get the benefits without spending too much time on the tracking process. Here are three essential things you should track:
1. Income and expenses
You should know how much money you make and how much money you spend on different things. Many people aren’t aware that they have financial problems until everything is too late. Or perhaps they’re aware, but they don’t know how it happened. Consequently, they have no idea how to solve it.
That’s why it’s important that you take note of your income and expenses. Doing that helps you spot the weak areas in your personal finance so that you can take the necessary actions.
To track your income and expenses, you can use a spreadsheet or a personal finance application. Here are a few personal finance applications you can use:
One simple rule on money management that I find useful is to spend your money to buy assets whenever possible.
Have you ever had days where you wondered why you’ve accomplished so little? That’s one reason why you need to track your time. You need to know where your time went.
There are many ways to do this. You can create a time log where you record all your activities during the day along with the time and duration. This could be burdensome though. A simpler way is to just track how many productive sessions you have in a day. The Now Habit (here is my review) suggests a session to be thirty minutes long but it’s up to you. The important thing is to make sure that the productive session is indeed productive. Reading e-mails and random browsing don’t count. Alternatively, you can track your time indirectly by tracking your goals for the day or week. If you achieve your desired goals then you know that you’ve used your time productively.
To track your time, you can use a timer and spreadsheet or use a dedicated time tracking application like Klok and RescueTime. If you choose to track your goals, you can use a to-do list application like Remember the Milk or even just a text file.
Do you have a good habit that you want to build or a bad habit that you want to break? As Peter Drucker said, what get measured get managed. So tracking it is a good way to reach your goal.
You can do it simply by taking notes of how many times you do the habit in a certain period of time. You can then see how your score is for that period of time. With good habit, the goal is to maximize the score while with bad habit the goal is to minimize it. If you want to, you can reward yourself whenever you make an improvement. A spreadsheet or a text file is enough for tracking your habits.
The first and second metrics deal with your personal resources: money and time. They are limited so you must make sure that you use them wisely. There’s still one more important resource actually, which is your energy, but I don’t know how to track it (any idea?). The third metric deals with your habits which, of course, are essential for an effective life.
By tracking your personal finance, time, and habits, you increase your awareness of your life. This helps you not only to figure out what problems you might have but also to take the necessary actions to solve them.
Photo by Pink Sherbet Photography