Adam Jacobson, President of Red Three Consulting in New York City, helps companies get the reports they need out of complex software programs such as Lawson and Oracle. He’s also my client.
Some time ago he wrote a post about zero-based budgeting. Basically, you start the year at zero and justify everything you do and the money you spend on it.
I wasn’t familiar with this concept but it sounded good, so I tried it.
I started the process by becoming aware of how, why and where I spend money. Due to the awareness, I made a number of changes — which have positively impacted my life.
For example, I moved my office back to my house because I could no longer justify paying rent for commercial space when I had a nice sunny room sitting empty. I worried that by moving back I was taking a step backward — but it was the right one.
I renovated the empty room by replacing the broken window, painting, and buying scaled down furniture to fit the smaller space. I also got rid of a ton of junk.
My new workspace is clean, clutter-free and peaceful. All summer the window has been wide open to the warm air. As I work, I hear birds singing and children playing in the yard next door. I particularly enjoy listening to the sound of rain.
I love going to work again. (Plus, my dog sleeps on his pillow in the corner. Love!)
Another change I made was to cut cable. I couldn’t justify the cost with my son downloading shows from Netflix while I watched shows, such as Downtown Abbey, on Amazon Prime. At first it felt a little weird to be cut off — no TV! But now, each time I glance at the hulking grey box in the living room, I think, “It needs to go.” Do we really need TV? No. I’m much better for it.
I also made changes to my diet — the first small step being to buy cage-free eggs. I then began buying more organic fruits and veges and cutting back on meat, the thinking being, you are what you eat. I wanted food with fewer chemicals; I wanted eggs and dairy products that came from humanly raised animals. Recently, I stopped eating all processed sugar.
I’ve lost weight, my energy has improved, and I feel better — less bloated and sluggish. Although organic food costs more, it’s been pretty easy to justify it.
Last year I made the decision to spend less time on social media / devices. I took Facebook off my phone, which helped. However, I realized that I did enjoy meeting people face-to-face, I just didn’t want to do business networking.
I joined a Meetup group that does hiking, biking and other activities. I had to buy new hiking shoes and other supplies and get my bike serviced as it had been hanging upside down in the garage for years, but it was all worth it.
I met people. I hiked up mountains. I rode my bike on rail trails and along the NH coast. I had the best summer of my life.
The point of this exercise is this: I started looking at things from a “why am I doing this?” perspective. Interesting what comes up when you ask yourself that question.
Since implementing zero-based budgeting, I’ve reduced my spending by about 10%, none of it painful. And, I’ve changed my thinking. I’m now in total simplification mode: if something adds complication to my life, I either change it or chuck it. It’s that simple.
My life, I have to say, is AMAZING. I’m rather astounded by it.
Anyway, give it try and tell me what you think. (And thanks, Adam.)