Budget….again?!

It’s that time of year again… no, I’m not talking about shops and radio stations playing Christmas music way too early… I’m talking about departments and teams in various organisations spending money as fast as they can because they have leftover budget to use before the end of the year.

If you give it more than a minute's thought, it’s a crazy system. If you don’t use all of the budget you were given this year, you risk getting less funding next year. That means you’re forced to find almost anything to spend money on, just so you can have enough money for the projects you have to do in the future. It’s silly, but perhaps there is a logic to it.

If you’re trying to best allocate where money should go in the future, you look at where it went in the past: how much did a function need before, how well did they use it, and what might they need going forward.

If you don’t spend it, the assumption is you didn’t need it—and therefore, you probably won’t need as much in the future.

Obviously there’s a whole level of detail missing when you look at things this high level and in such a binary fashion, ignoring all nuances and adult discussion needed, but let’s stick with it for now…

Carrying on down this line of thought, it does make sense to a degree, and not only does it apply to budgets, but this principle applies to our bodies and minds as well.?

Skills, habits, and abilities function on a "use it or lose it" basis. The less we engage with something, the more it fades away, deemed unnecessary by the efficient-but-ruthless accountant in our brains (bet you didn’t even know you had one!).

The Budget for Life Skills

Imagine your brain as the CFO of your personal life (it’s also the CEO, VP of sales, and overly arrogant new-hire). It tracks what you use most and invests resources accordingly.?

Haven’t spoken French in years? That part of the "budget" shrinks, tu n'as évidemment pas besoin de le savoir! Skipped workouts for months? Your muscles say we’re out of here and doing a chin-up now feels impossible. Neglected your sense of humour? You might forget just how much it contributes to stress relief, creativity, and connection.

(Weirdly song lyrics are immune to this as you will always remember the words to Oasis’ Wonderwall, or perhaps Don Mcleans’ American Pie)

The truth is, we can’t rely on intermittent bursts of activity to maintain proficiency. Just like an organisation needs a steady flow of funding to stay operational, our minds and bodies need regular input to stay sharp. A one-off effort doesn’t cut it—physically, mentally, or comically.

And as I’ve spoken about regularly in the past, keeping sharp in all areas, particularly in your relationships, which can be helped immensely by using humour, is vital for your business.?

Summing Up

It’s already been said, but if you don’t do something regularly enough you will forget how to do it, and nothing can be more true when it comes to the so-called soft skills that you possess.? But it’s equally important with those technical skills, like budgeting, and the logical/critical thinking skills that you need to employ.

Does it really make sense to judge a budget based on what has been spent in the past?? Shouldn’t it be more focused on what we intend to spend in the future?

In reality this question deserves an article of its own, but it’s certainly something to contemplate as we move into budgeting time.

It’s an example of the debate that exists between bottom-up and top-down budgeting.? Do we really want all of the detail that is created from a bottom-up budget, along with the time that this takes, or do we want a more high level process that just focuses on the percentage change from the actual, or out-turn, numbers from the previous year??

Let me know what you think and what you intend to practice, as I obviously need to practice my article image skills ??

Leave a comment

Robin

PS. If you’re one of those organisations that have budget leftover, there are a few ways I can help:

You may have seen that my brother and I are on a quest to attend a football game at all 92 English football league grounds (follow our journey https://www.instagram.com/kiziak92 / https://substack.com/@kiziak92 ) and if you want to sponsor our endeavours feel free to reach out.

Also, if you’re one of my football related contacts feel free to reach out with any invites (hospitality or anything else) to help us on our quest.

As the saying goes, if you don’t ask….

And of course, I’m always happy to discuss finance, supply chains, logistics, distribution, retail, or anything else.

Hit reply and I’d be happy to chat!