I'm tight with my own money. I don't mind spending, as long as I get value. But I consider EVERY purchase and never spend money for the sake of it. I hate the feeling that I've wasted money.
I've worked with people (and typically in larger marketing departments) who make sure they spend their budgets early in the year so they don't lose it as things invariably change. I've also used zero-based budgeting, a technique where everyone starts with no budget and has to justify every penny.
When it comes to financial decisions, I believe in the power of spending money rather than budgets. It separates those who are determined to extract as much value from their spending as possible, and spend on the right stuff.
Businesses that spend money rather than budgets give people accountability and responsibility. When you think about money rather than budgets, it fundamentally changes how you think about what you are doing.
The difference is in mindset - those who take personal ownership of their activities. It brings a host of benefits:
Freedom to Innovate: Budgets provide structure, but they can also stifle creativity to try new things. Getting into a mindset of spending money means we open ourselves up to new opportunities.
Seizing Opportunities: Opportunities often come from unlikely sources and they present themselves in peculiar ways. Waiting for budget approval processes can slow us down. Growth can require investment, so being constrained by budgets means we can overlook those opportunities.
Trust in our Leadership: We are entrusted with the vision and direction of our companies. We have a responsibility to make bold, strategic decisions that drive growth. Trusting our instincts and investing in our vision is essential, even if it means going against the process.
Of course, I have a household budget, but I spend my money. The moment that changes, I'd end up buying stuff I don't need or don't get value from. I might be able to afford that new bike, watch or handbag but am I buying it for the right reasons? Probably not.
