Trigger Question #69:
Budgeting is easy.
At least the commonly accepted process is. The one that relies heavily on the word estimate. The one that lets you increase last year’s numbers by this year’s rate of inflation. Or maybe you use a process equally make-believe.
Perhaps you are smarter and rely more on the word assumption. Or you have a sense of adventure and you play What-If? You know what I mean. What if we assume that… something or other?
Assuming and what-if are powerful ways to help us think in terms of possibilities and probabilities.
By the way, do you understand the difference between possibilities and probabilities? Almost any outcome is possible, but fewer outcomes are probable. Your job is to decide which is which.
So, if you’re smart, you start your budgeting with what-if assumptions. But if you are wise, you start with zeros. Zeroes trigger “brand new” thinking. Like this: “Let’s imagine we are starting from scratch.”
And if you are really, really wise, you practice zero-based thinking in all that you do:
- Why are we still doing this? (Let’s imagine we are starting from scratch.)
- Why does this policy matter? (Let’s imagine we are starting from scratch.)
- Why are we in this market? (Let’s imagine we are starting from scratch.)
- Why are we having these weekly/monthly meetings? (Let’s imagine we are starting from scratch.)
And so on. You get the picture.
Think of it as zero-based daily living. Question everything you do and every tool you use. Does it still make sense? Does it still add value? Why are you doing it? Why are you doing it this way?
No, this process does not need to take much time. Even a few seconds of considering the purpose of what you are doing, or reminding you of the reason behind it, can be enough. Enough for what? Enough to get you going with the right mindset.
Remember, ask a quick “Why?” Why are you still reading this Trigger Question? (You can assume my question is a joke. But what if it’s not?)
Welcome to my side of the nonsense divide.
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My thanks to British philosopher Bertrand Russell for triggering this Trigger. He once said, or wrote, “In all affairs, it’s a healthy thing now and then to hang a question mark on the things you take for granted.”
And to Peter Pyhrr, who came up with the idea of zero-based budgeting, and then wrote a book called Zero Based Budgeting: A Practical Management Tool for Evaluating Expenses. (No, I haven’t read it.)
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