When I was younger and purchased our first home, I developed a household budget. We had to manage our spending since we had more expenditures such as a home mortgage, insurance, and work clothing. We transitioned from college kids living day-to-day into professional office workers. Our new starter home needed appliances, window coverings, and furnishings. We bought a second car which increased our transportation expenses. The household budget allowed us to balance short-term and long-term priorities. There was never enough money for all our desires, and we needed to save for unexpected expenses.
Home computers and electronic spreadsheets were not yet on the market, so budgeting was done the old-fashion way: by hand with a calculator. Actual expenses were recorded on paper and compared to budget. As the years went by, the budget was recorded on a spreadsheet, and became more complex. I kept track of my retirement investments, estimated federal taxes, and college funds. One thing never changed: there was never enough money for all our desires, so we had to prioritize.
I am writing this blog in early September. It is Labor Day weekend, the last summer holiday. Schools have either begun or will start shortly. August vacationers return to the office and staffing goes back to normal levels. Suppliers and customers interface more often. Phone, email, and text volume increases. The pace of life charges full steam ahead until the Thanksgiving break. But it is the office budget process that I most feared. On top of the normal fall rush was budgeting for the next year.
Business planning is different than household planning. Preparing a business budget involves a process that begins with the lowest business team budget and builds layer-by-layer through the entire corporation until a corporate budget is approved by the board. The budgeting process is developed with target completion dates for each organizational level. The higher-level budgets are more complicated because they are a compilation of lower-level budgets.
Budgets are approved through a series of review meetings where managers listen and question budget presentations. PowerPoint charts flow continuously on large screens. Presenters try to impress their supervisors with their creative ideas and informational slides. No matter how hard the corporation tries to standardize and streamline the budget process, managers politically deviate to exhibit their executive prowess. Cleverness is frequently rewarded over thoughtful management practices.
All participants know that they need to present good results but usually understate their budgets because their managers always increase the bottom line before the budget process is finalized. My proposed budgeted trading income was always increased during my last assignment in London. Once my supervisor agreed to my budget, I waited until November to be told that the head of trading increased my manager’s budget which then trickled down to my budget. Because the budget increase consistently happened, I just shrugged my shoulders and said, “I will do the best I can.” I was fortunate that my actual results exceeded budget, so perhaps senior trading management suspected that I was holding back and low-balling. In my opinion, the process encouraged this practice although I tried to be reasonable when I initially prepared my budget.
One year, my team made a mistake and inaccurately placed revenue in the wrong budget unit. The total was correct, but the individual units were misstated. This error was caught after my budgets were approved. This meant that I was still responsible for the unit budgets even though it was misstated. That year was miserable as my supervisor never let me forget this mistake and told me repeatedly that I had ruined his career. Somehow, my trading teams exceeded all their unit budgets despite the error. I learned not to repeat this mistake again.
Why are budgets so important? In Genesis 1:28, God commanded humankind to be fruitful and multiply. We are to be good stewards over God’s resources. Budgeting, while imperfect, is a process that efficiently prioritizes resources. This activity allows good decisions to be made through an organized process. Hopefully, order trumps chaos. The downside is that budgets are developed by humans who may have personal agendas, like developing PowerPoint charts to impress their supervisors. I did not have these issues to contend with when developing my household budgets, but these issues exist when multiple people are involved.
Even though God gave humankind great responsibilities, God imposed boundaries. God told Adam and Eve not to eat the fruit of the tree of knowledge. Wanting to be like God, they ate the fruit and committed original sin. Sin continues to trickle down through the generations.
Budgeting allows corporations, non-profits, governmental agencies, and individuals the opportunity to prioritize God’s resources. It is a chance to plan for goodness and flourishing. Obedience creates abundance. The process also poses the risk of errors, waste, or misuse of God’s resources. Disobedience results in harm to our neighbor and God’s creation. Developing mindful budgets allows Christians to be good stewards of God’s resources.