Written on 4/04/2008 by Jesse Mecham, a personal budget guru and owner of You Need A Budget.

The famous engineer-inventor Charles Kettering once said, "People are very open-minded about new things - as long as they're exactly like the old ones."

My challenge to you is to keep an open mind and not be like those people Charles Kettering was describing.

In our quest for personal development, we soon discover that time is a scarce but vital resource. We need time to do those things necessary to focus on areas of our life that need improving. The other night I was looking over some language learning software and told my wife that I really wanted to learn Spanish. Her response was all too familiar, "That'd be great. But where will you find the time?"

Money management is one of those necessary evils that robs us of our precious time. The fact that it is necessary makes the case all more compelling to manage it so that the time spent is minimal. This one simple money hack will do just that. First, we need to look at where time is wasted.

Find the Leak Before Bailing Water

While my professional background is accounting, my passion has always been money management at the personal level. Over the past four years I've worked with hundreds of people -- teaching them how to manage their money more effectively in less time. One of the biggest time leaks I've found consistently with people earning anywhere from $40,000 to $150,000 is the timing of the payment of bills with the receipt of a paycheck.

Most people manage their bill paying something like this:

The bill arrives, account balances are checked, is money there? No. Set bill aside until money is there. (Time spent checking account balance but not actually paying the bill? A few minutes).

Later that night the person thinks about the bill and mentally goes through some calculations to ensure that when the paycheck does arrive, there will be enough money to pay the bill. (Time spent thinking about something when no action can be taken? A few minutes).

The next morning the person sees the bill on their desk, fridge, etc., and mentally notes that the bill will be paid when the paycheck arrives. (Less than a minute, but still a distraction).

Two days later another bill arrives, account balance is checked again even though the situation hasn't changed. The bill is set aside until the money is there in a few days (Time spent without any result? A few more minutes).

If you add more bills, more thinking and distraction without action, and the final payment of the bill, the total time spent paying bills is no longer just the time spent clicking the mouse or licking a stamp (I recommend clicking), but the time spent for all the non-value activities as well.

Automatic bill paying does not solve this problem for 70% of the population, because that 70% of the population is living paycheck to paycheck. Online bill pay does do quite a bit to cut down on the actual bill paying time, but again, it does nothing to curb all the wasted time that comes as a result of having to constantly time the payment of bills with the arrival of paychecks.

Fixing the Leak

Allow me to describe the ideal process -- achievable by anyone:

The bill arrives and is set aside. Once or twice per month all of the bills are paid. (Time spent? A few minutes).

If you can setup automatic bill paying, the the entire process is limited to the time spent setting up the automatic bill paying and the occasional "sanity check" to ensure that everything is still working as intended.

The idea behind fixing this leak is simple, while the implementation, depending on your circumstances, can appear daunting. The solution: Live this month, on last month's income.

Imagine if, at the beginning of the month, you simply took all of your bills and paid them in one fell swoop? You wouldn't need to check your account balance, wouldn't need to be reminded multiple times about when the next paycheck would arrive (it already had, probably weeks before), and wouldn't have to do the same process multiple times, but could consolidate it into one batch.

You're working in February, spending money you earned in January. Throughout the month of February, you're earning money and it's simply being set aside waiting for March. Once March arrives, you live on those February earnings. Not only does bill-timing-to-paychecks go away, but you also decrease your stress levels and increase your ability to make wiser financial decisions with the breathing room from not living right on the financial edge. As an added benefit, those people living on variable incomes now know exactly how much they have to work with for the month because they earned it last month. That associated stress is eliminated as well.

This type of situation can be enjoyed by anyone if they're willing to make it happen.

Now, let's not forget Mr. Kettering and maintain that open mind! Thousands of people have taken the plunge, cinched the belt for a bit, scraped together some savings, sold some stuff, and built up what I call a "Buffer" fund that let them make it through the month without touching that month's paychecks. The result? They're now perpetually living on last month's income, which means time saved and stress avoided.

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