Important versus urgent: Applying the Eisenhower Decision Matrix to your finances


I’ve increasingly found it important to determine whether something is important or whether it is just urgent, as I think that we all (myself included) tend to confuse the two.

I just recently learned that the matrix of the important and the urgent is known as the “Eisenhower Decision Matrix“, named after the U.S. president. (Although it goes by different names as well.)

Important versus urgent.
Important versus urgent.

But this is all more a time management context. How do we put this in the context or our wallet?

Urgent and Important

Something that is both urgent and important is to be done first and immediately.

What this brings to mind are the basics to survival. Things like:

  • Food and water
  • Shelter (safety)

These things must be prioritized over everything else. While this may seem obvious to many, you might find yourself in a predicament where you can either pay a bill (like a particularly large credit card) or your rent/mortgage—but not both. There is no decision here: you figure out your shelter first. Let your “unsecured” debts go first, if you have to choose.

But there are more basics:

  • Transportation
  • Clothing
  • Utilities

These are in some ways just as important as food and shelter (and they are required for existing in our culture). A home without heat isn’t going to work in most places. And a home where you are unable to move around (to jobs or other areas) isn’t going to work either.

That said, if I had to choose, I’d choose my home payment over a car payment.

Urgent and Not Important

Something that’s urgent but not important is usually something where a decision needs to be made quickly, but the outcome isn’t life or death.

So when your favorite band is coming to town, or a great shopping deal shows up, it may seem important (tickets go on sale tomorrow!) but it’s really just urgent.

But in this case, making a decision like this needs to happen only after all of the important decisions have been made. Because it’s urgent, this might mean that you have to say no right now.

Not Urgent and Important

Ahh, here’s where people stumble. Things you need to do, but that can be put off until tomorrow. So much falls into this category. Things that come strongest to mind here are:

  • Future planning: If you’re only thinking about today, then tomorrow will come and you may not be prepared for it. Better to deal with some discomfort and extra obligation now and plan for the future before it becomes something large and overwhelming. For me, this means things like retirement and life insurance (or really any kind of insurance). Not fun, but, well, important.
  • Present planning: I’m referring to budgeting, of course. While it’s much simpler and easier to just exist in the moment, chances are that you won’t make as good decisions as when you have a larger perspective on your situation. Writing down what you spend, and planning it all out in advance will help you get that larger perspective. (Yes, I know it’s hard.)
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The problem here is that you can put these things off forever, relinquishing control of areas of your life that you will one day wish you hadn’t. And if it feels like I’m trying to guilt you, that’s not my intention, but if that motivates you to take some control today as opposed to kicking the can down the road, then so be it.

Not Urgent and Not Important

Finally, we have everything else. All the other minutiae of life.

I once saw a therapist who talked about how people confused “wants” and “needs”. When he heard people say that they “needed” something, he would always politely challenge them. “Do you really need it? Or do you just want it?

In the same vein, how do we determine what’s “important” versus “not important” is difficult and personal (not to mention a bit too binary).

And this is perhaps where this decision matrix breaks down a little bit. It may be an oversimplification to say something is definitively in one category or the other.

But if you remember nothing else, keep in mind that there’s probably something on the above list you’re not doing, that—and here I reserve my weasel word—you really should.

But enough about me. Do you ever consider whether something is important versus urgent?

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