Zero-Based Budget For Life
Written by Elizabeth Grund – – –
As more states begin to slowly reopen and people venture out of the house, we must resist the urge to think that life is returning to “normal.” The lack of normalcy can be uncomfortable to think about. The life as we knew it at the beginning of 2020 is not the life we will be living for the remainder of 2020, or even for the years to follow.
However, this is not a negative thing. With great amounts of change comes great amounts of opportunity for improvement. In fact, the months we have spent in quarantine offer a rare but valuable opportunity to “zero-based budget” day-to-day life.
What’s a zero-based budget anyways?
For context, zero-based budgeting is a practice used by businesses to revamp their budgets starting from a base of zero (hence the name). This approach allows businesses to rigorously analyze every expense on their budget by adding costs back to the budget one by one.
There may be items on the budget that have been there for years or small charges that slip by a standard budget review, but under a zero-based budgeting approach, they can finally by examined and possibly eliminated. Funding is determined by the efficiency of and need for an expense rather than budget history.
Starting with zero, then only adding back things that add value.
Fortune 1000 employees may get chills with the mention of zero-based budgeting, as this drastic approach to budgeting is often associated with lay-offs. It is a time consuming, detail-oriented process that is normally reserved for dire circumstances. However, despite the obstacles associated with zero-based budgeting, it is one of the most effective ways to produce sizable savings.
If you are interested in zero-based budgeting from a business standpoint, Deloitte has a much more thorough explanation here. Also, a 3 minute video from McKinsey & Company:
Quarantine forces us to re-imagine our lives
However, the zero-based school of thought does not have to be limited to corporate budgets; you can use this approach in your daily life. Quarantine was difficult as social interaction was limited primarily to members of your household, most leisure and recreational spots closed, such as gyms, restaurants, and malls, and work from home limited the capacity in which you interacted with coworkers and clients. In a sense, quarantine allowed us to see our lives stripped to the bare bones.
What made quarantine difficult for many of us is exactly what makes quarantine a valuable learning experience. With things gradually reopening, it can be tempting to push to resume all pre-quarantine activities just to have a sense of normalcy in uncertain times. Before you try to jump right back into your “old life,” consider what you missed most during quarantine and what, or who, you may not have missed at all.
What’s important to me now?
This can be helpful for saving money. Maybe you began cooking more at home and realized you enjoy that just as much as a comparable but more expensive meal at a restaurant. Personally, I was a fitness class regular before quarantine, spending hundreds of dollars a month on boutique spin and Pilates classes. When I was under stay at home orders, I became more comfortable working out on my own, either self-guided or using free videos on YouTube. Now that gyms are reopening, I have little interest in returning (both from a safety standpoint and because I have been satisfied with the convenience and low cost of exercising at home).
The zero-based mindset is also helpful to manage a less obvious asset: your time. It is worthwhile to pause to consider where your time is put to the most meaningful use:
- Have you picked up any new hobbies during quarantine that bring you joy? Consider replacing items from your old schedule to make time to continue these hobbies.
- Are there old friends or acquaintances who you have not missed spending time with? In some cases, distance makes the heart grow fonder. In other cases, distance offers time to reflect on how your values and lifestyles align and if this person contributes positively to your life in any way.
- How can you use your time to better yourself? Quarantine gave us all a chance to get to know ourselves on a more intimate level than ever and reflect on not only who we are, but also who we want to be.
As you consider components of your pre-quarantine schedule, identify the elements that fill you with dread or anxiety. Consider eliminating those pain points wherever possible. It is possible there are people you have been spending time with out of habit, but that time could be better spent elsewhere. I am not suggesting you cut these people from your life entirely, just that you delegate less of your time and energy into fruitless relationships.
I find the temptation to rush into the arms of my “old life” stronger the more things re-open and the more opportunities present themselves. I would advise you to resist this urge for more than the obvious safety concerns that come with re-opening the economy.
Life is too short to be spending time on activities and people that do not contribute positively to your life in some way. There are some joy-less duties that we must fulfill, these were what made up most of quarantine life. The future is exciting not because we will return to our old life, but because we have the potential to create a better life. Now that we have seen just how fast life can change, it is important to be more mindful than ever on how we quantify and delegate our free time.
A Zero-Based Time Budget
That all sounds great – so how should I think about this? Without being too prescriptive or robotic about it, how about a simple flowchart to see whether an activity (or interaction with a specific person) should be added back to your zero-based budget?
