Yesterday I was in church and the pastor asked this question, “who is the one person who has had the most significant impact on your life?” That’s a hard question, because there are many people to choose from: parents, spouses, mentors, teachers, coaches, even haters. As I pondered the question, I thought of a different one: “What is one thing that has had a significant impact on my life?” That was easier to answer, because right away I thought of one thing — Cash Flow Planning.
Wait... What? What exactly is cash flow planning? That sounds nerdy. Well, it’s a fancy name for a budget. And no, I’m not a nerd. Well, maybe a little, but cash-flow planning is for nerds, divas, hippies, social justice warriors, and everyone in between. It’s the great unifier. And I’m not a “math person.” It was never my favorite subject in school, in fact, I struggled with it. I do have an MBA, but crunching numbers was never my thing. Am I really saying that out of all the amazing things in this world (compound interest, books, chocolate, and wine) that the single best thing to happen to me is learning to budget? Yes. That's sometimes how it goes when we discover something profound and life changing. It’s usually boiled down to a simple idea, and sometimes it's like an “aha” moment. Something clicks and we realize that the single best thing, was in front of us all along; we just never knew what we were looking for, or that we were even looking for it.
I was introduced to this powerful concept of cash flow planning in an unexpected way. My husband and I did pre-marital counseling in 2008. One of the things we learned was to seek out another couple who was winning in marriage and be mentored by them. We met a couple whose life and relationship looked genuinely good. They shared a lot of the same values we have, and to break it down, they simply looked like #MarriageGoals. They were generous to one another and to those around them; they quietly do good and bless our community. They serve one another in a way that appears effortless. It’s like they both have a PhD in the other. They anticipate one another’s needs and meet them quickly. They serve together and laugh a lot! And most importantly they have been married for a few decades, so I knew they could share some knowledge. One day I asked, "what is the 'one thing' that helped your marriage thrive so well?" They mentioned many things, most of which we expected to hear: God, communication, compromise, and then they started talking about cash flow planning.
They taught us something we didn't even know to look for, how to budget. Not the type of budgeting that you do once a year and don’t revisit again until the new year, nor the type where it’s all in your head, nor the type where all your bills are paid and you have money left over so you can spend it all. No. They taught us the power of creating a monthly zero-based budget and our lives have never been the same. Budgeting not only transforms a good marriage into a great one, but this concept is something every person can do that has access to money, whether married or single.
A zero-based budget is the blueprint for our lives each month. It is the master plan that helps us reach our major goals by first taking care of the smaller, everyday goals. It is where we decide how we are going to spend each penny of the income we bring in that month. It’s the no dollar left behind campaign for our personal finances. It is written out on a cloud-based spreadsheet that we both have access to all the time.
In part 2, Angela will describe how to build a zero-based budget.