Onboarding -- just the beginning

 

     There was recently a poll to ask how important onboarding was. An answer could be given between 2 and 5. Most people chose 5 -- very important. I certainly won't argue against that. But, it is a large mistake, in my opinion, to become complacent because you have a good onboarding system set up.

     Onboarding can serve a lot of getting started questions. What are the benefits? How do you apply for them? Setting up direct deposit of paychecks. What are the basic company rules? Hours? Remote options (if any)? Security -- both physical (ID cards usually, sometimes thumb keys) and network (passwords, network access, etc.). These are all important (and I'm certain I have forgotten some important aspects). They provide a working environment for the new employee -- giving that person the ability to function within the company. This process may take as long as a week to get ID cards returned, network permissions changed, etc -- and it is to the company's (and employee's) benefit for this to happen as quickly as possible.

     But consider a fledgeling bird. They have watched their parents, exercised their wings, grown their feathers. At some point, they jump off the edge of the nest. Most of the time they stay in the air. Occasionally they fall to the ground (hopefully not far, birds still can attain a pretty fast terminal velocity). But, now on the ground, they are vulnerable -- "out of their element" and without support. They have a small window to recover or they will enter the next phase of the circle of life.

     Onboarding should, minimally, provide the nest -- the ability to survive while they become functional. But exercising that muscle means doing tasks and projects. Growing those feathers requires time and experience. And they are often required to jump off the edge of the nest before they have all of the knowledge and experience needed. (Recognizing that they would have a hard time getting it without applied efforts.)

     So, how to help the fledgelings soar? Whether in a company, a school, an outdoor survival school, or whatever. This is where mentoring and coaching (see my earlier blogs -- and other sources, of course, exist) take over.

     I would suggest that during the process of onboarding is the best time to also start the mentoring system. It may be a bit early for coaching unless both the company and the employee have a well-defined focus for their work tasks from the very beginning. But such is possible. If so, having the same person perform both coaching and mentoring may work very well (but multiple people can serve the purposes).

     By all means do prepare the plane but get that runway cleared to ascend to the heights.

Causation versus Triggering: Keeping our power

      "He made me sad". "She made me angry". "They keep me so frustrated". Do any of these phrases sound familiar to you? Do you ever think about them in preparation to not have it happen again? What do you consider? How do you approach future prevention?

     I certainly would never try to say that a person hasn't done something that you reacted to. They break that expensive vase that has been in the family for years. They track mud and leaves all over a freshly cleaned and waxed floor. He borrowed your car when you were about ready to leave for a job interview. And there are much worse actions that may become part of your life.

     But most people use the word "cause" (or "made" or "keep") in a way that isn't real. If something CAUSES something else then the result is (almost) universal. Whenever A is done then B is the result. If B sometimes happens and sometimes it does NOT happen -- then there is no "cause".

     Let's look at it in a different way. We have two households. In each household, a running child causes a vase to be broken. In the first household, the person in charge gets angry and reacts with harsh language -- perhaps even gets violent. In the second household, the person in charge exclaims, then laughs, and then has the child stop so they can discuss what has happened, how behavior needs to change for it not to happen again,  and possibly what the child needs to do to make up for the problem (they probably need to clean up their mess -- perhaps they also have to save up their allowance to buy a new lamp).

     The initial action (breaking the vase) is the same. The results, or reactions, are very different. Thus, breaking the lamp did NOT "cause" anger. There are characteristics, within the person in charge, that are different -- making each more likely to react differently.

     And that is the way it is with most things in life. There is an action. There may be a dominant reaction -- something that most people do in reaction. But there are alternate reactions possible -- many of which may be more productive.

     As a former child and as a current parent, I recognize that there are always "buttons" that can be pushed with people. Children are especially good at discovering these -- and making use of them. "If I do THIS, then they will react like THAT". Everyone has different "buttons". The full statement should be "If I do THIS with THIS person, then THIS person will react like THAT". Different person, potentially different reaction. Different person, different "button" in effect.

     And that is the way of the world. No one can control the actions that occur -- by other people, by nature, by the universe in general. But we have a LOT of control over how we react.

     Consider that next time you hear yourself say "that makes me so angry". Just why is it so?

Being Yourself: Sometimes the hardest thing

 

     According to my mother, when my father was dating my mother, they did a lot together. They went to dances. They went to the movies. They went on picnics. After marriage, my father soon settled back into a routine -- go to work (When he had work. Although a very hard worker, since he had only a ninth grade education, he was usually on the queue to be first let go), come home, eat dinner, and settle down in front of the television. And so the days went. Our family went on a vacation once in my childhood -- a camping trip with my aunt and uncle and cousins. We did not stay the full planned length of time -- some type of argument. This was not the life that my mother had expected within the marriage.

     When most of us approach a job interview, we are asking ourselves "what do they want to see in a candidate for the position?". Yes, the interview should be mutual but it often isn't seen that way by one party or the other or both. There is nothing wrong with trying to present one's best behavior and attitude in an interview (or a date, or ...) as long as it is still within the range of behaviors that you would normally do. But trying to present an image of someone you are not is a mistake. Strive towards that mutual interview where you are discovering what the company is and they are discovering who you are.

     Unless you are applying for a role in a movie or play production, it is not a good idea to pretend to be someone that you are not. Look at the situation from a long-term basis. Can you, and do you WANT to, present that person for the next 20 years? It is a tried-and-true technique, for personal behavior modification, to "fake it until you make it" but that doesn't work if you do NOT want to shift behavior in that direction. You are more likely to be tired, irritable, and angry.

     If you bring a smile to your face each morning, it is difficult to not have that influence your mood. If you glower at your workmates each morning as you arrive, don't be surprised if they start becoming hard to find in the morning.

     Dating advice often says to do things you like to do in order to meet other people who also like to do those things. But often we will find our eye drawn to those who do those things that we idealize as things we would like to do, think we should do, and admire others who do them. As an example, you admire someone who exercises on a regular basis and has a good awareness of their body to properly eat. If you are not of the same mindset then you should NOT try to be involved with that person as it is a conflict that is not likely to change. (Note that it can work if priorities are not the same for both; if one person has a high priority of financial security and the other has a high priority of aesthetic achievement then incompatibility can still achieve personal goals.)

     In general, be the person you are most comfortable being. Don't expect to be able to change others (you can't) and if others want you to change then determine what you, yourself, want to do. They can't change you but you can (if sufficiently motivated) change yourself.

     Accept that being the best you, that is natural for you to be, is good enough.

Grooming for failure: Purposefully or accidentally

 

     Grooming is a methodical preparation for the future. Parents groom their children to be sports stars or, perhaps, world-famous pianists, doctors, or lawyers. In wealthier areas and in some countries, such as Japan, the process of grooming their students for academic, and networking, success starts at birth or before. They are set up to be in the best nursery, the best kindergarten, the best elementary school, the best preparatory high school, and the best college to allow for greatest potential heights. Whenever there is a specific future envisioned, dedicated focused attention and training can facilitate that goal. It is to be hoped that the person being groomed will have the same goals as that of the person doing the grooming -- but that is definitely not always the case. Children rebel once they have grown and decide to be artists instead of lawyers. But, in many cases, that backlog of direction will achieve the groomer's goal.

     The same types of processes occur in business. We often call these processes mentoring and counseling. However, it may also include active placement into positions, carefully choosing assignments, choices for visibility and experience which interconnect between the mentoring and putting them on a "fast track" towards a goal.

     These are all instances of grooming for what most would consider a positive result but people can also be groomed for failure. At one place where I worked, a restructure of the organization, moving from a hierarchical structure to an Agile one, meant that a considerable reduction of management would be needed. Although I had trained for both Product Owner and Scrum Master positions, it was decided that I would be one of those let go rather than moved into one of the newly created positions. In order to achieve that, it was necessary to create a paper trail to justify it. So, no new assignments were made and, each year, it was written down that I was underperforming. Then another year of requests for assignments and no assignments given and more paper trail comments.  A transfer would have been useful but there were no such posts available. It happens.

     It isn't just paper trail justifications that can be set up for grooming for failure. A long-term teacher was making a reasonable amount of money because of their seniority. If the school district got rid of them they could hire two novice, inexperienced, teachers (with a bit of change) for the same amount. But, in theory, the union did not allow a "tenured" teacher to be fired just because the district wanted to save money. But what the school administration COULD do was to withdraw all support services to the teacher. No bathroom breaks. No support for discipline for misbehaving students. Students are, in general, very aware the situation in a classroom and could recognize that the teacher was being left to survive. Thefts in the classroom went up. Accusations of the teacher and of other students went up. The union, being afraid of doing anything in a period of budget crunches, would not help. The teacher "volunteered" for the early retirement being offered by the school district.

     I will repeat the beginning sentence. Grooming is a methodical preparation for the future. Most would think that that would be towards a mutually beneficial future. But it can be a situation where it is NOT mutual -- where one person wants the outcome and the other not. And it can be preparation for other outcomes not known or desired.

Mentoring & coaching: What's the difference?

 

     My first mentee was at Bell Laboratories about 40 years ago. I had just completed my Master's degree and the location was expanding quickly so mentors were needed and I was willing. Over the years, I have been a mentor to a dozen people or so and coached another couple of dozen.

     Mentoring. Coaching. What's the difference? Well, certainly there is not a single correct answer to that question. For me, coaching is when I am trying to help someone perform a specific task. They have just been assigned to do Tier 3 customer support. They have a specific task to do. I work to help them to organize the structure of their new task to help them do the best they can. This may involve putting together scripts, sets of progressive questions, methods of debugging, and so forth. This should be done in conjunction with the person being coached so that they understand the reasons and the progression of the steps. Plus, there is a good chance that they will come up with ideas that I would not have considered. Having additional experience is not always good. Sometimes, having less experience puts you more into the shoes of your customers.

     But how about mentoring? Someone who is being mentored is also likely to have a specific task, or tasks, that have been assigned. Whether or not they need coaching will depend on how much, if any, experience they have doing those tasks.

     If they are new to the group, department, or company then they may be able to take advantage of mentoring. Mentoring should never be forced upon someone -- though having a mentor assigned as part of onboarding is a good idea in my opinion. The distinguishing thing about mentoring is that the mentor acts as a scout searching for obstacles, pitfalls, traps, and short cuts. The mentor should know how the company works -- we're not talking rule books or lists of protocols -- just how things get done (and how one can set oneself up for promotion, good reviews, ...)

     In a mentoring situation there may certainly be questions from the mentee. As in a job interview, this is a good thing as it indicates they are truly interested. More importantly, the mentor is there to answer questions that have not yet been posed. As the mentee onboards, a lot will be the basics. Where are the restrooms, which areas do they have access to and how do they obtain access to other areas when needed? What are the customs for food? Delivered? Out as a group? Once a week? Daily? What are the core hours when they need to be available?

     Once past the newbie stage, the answers become more involved and more tailored to the mentee. The mentor works with the mentee about career development. If not compatible between mentor and mentee, the mentor may try to move the menteeship to someone else more directly knowledgeable. What do you do? What do you not do? What people should be approached? How should they be approached? Which people should  be avoided? What end arounds can be done if you need information from someone who will not help? How does the mentee become known (in a positive way)?

     My mentees, over the years, have tended to do better within the companies than I have done. There is a difference between knowing how the interactions exist and being willing, and able, to work within them. But, without knowing those unwritten rules, people can be at a loss and flounder.

     Mentoring: answering the questions not known to be asked.

Resentment and Anger: When the "Golden Rule" is NOT applied

     Most people have a general knowledge of what the "Golden Rule" indicates. It is not confined to the Christian religion.  It is also featured in Buddhism, Hinduism, Islam, Judaism, Taoism, Zoroastrianism, and most major religions. It is also known by, and sometimes followed better by, those who do not follow a religion. It has many phrasings but, basically, it is to "treat others as you would like to be treated".

     (Note that people tend to apply "Golden Rule" to a LOT of very diverse things which have little, if anything, to do with THE Golden Rule.)

     Much of the time, the Golden Rule is treated only as an ideal goal of behavior. It is something to strive for, something as a guide to be a better person. But, what about the results of NOT applying the Golden Rule? This is something which weakens our businesses and society on a daily basis.

     You have just gotten a new job. You are a bit nervous as you haven't done this work before. You want to make sure you do the job well and have the company proud of you and be happy they chose to hire you. At the end of the first week, you have completed your first assignment -- turning it over to the test department a week before your manager told you it was expected. But, on the second week, you find yourself called into the office. They ask you why you checked a website selling products during your lunch hour. They ask you if you normally only type 20 words per minute and why you were only active on your keyboard for 25% of your time. They are obviously spying on what you were doing and how efficiently they think you were working. (You obviously were working very well to be able to turn over your assignment in half the expected time). Do you still feel like doing your best for the company? Do you feel trusted? Do you have your resume up-to-speed? 

     Imagine that you are yourself. You have saved and have money in your pocket. You want to buy a nice gift for your mother and you are willing to spend more. So, you go into a nice store which has more expensive items. When you enter the store, all eyes fall upon you. No, they aren't deciding which among them can be first to serve you. The eyes are all questioning, suspicious. You haven't done anything wrong and your only plans are to get something nice and give money to the store yet you are treated this way. They are not only NOT treating you the way they would like to be treated but they are going out of their way to treat you just how they would NOT want to be treated. What would your normal, reasonable, rational response be? Frustration? Resentment? Anger?

     You are walking down the street because you would like to get some exercise. You have reached a part of town that you don't normally walk in but the sidewalks are clean and you see a nice park in the distance. There are a few others walking along the street also because it is a nice day. A police car pulls up beside you and asks you what you are doing and why you are there. After a few minutes, they pull away but not before telling you that they expect you to be gone when they return. The police car doesn't stop beside any of the other people walking along the street. Are you still enjoying the day? Are you still looking at the other people, treated much better, as fellow strollers? Do you want to return to that neighborhood? Are you angry? Underneath that anger, are you also afraid? Do you feel served and protected?

     There is an old cliché (yes, there are a LOT of such clichés) -- "you create what you fear". If you treat your employees as untrustworthy they will eventually be untrustworthy. If you treat your customers as potential thieves then they will be sorely tempted to become thieves -- after all, they are already being treated that way, why not? (Most will still continue to be honest even when badly treated.) If you treat your fellow people as if they are not fellow people then you will divide and ostracize. 

     So, following the Golden Rule may be hard. It may be an unachievable goal for all times and situations. But deliberately negating the Golden Rule (let's call it the "Corroded Rule") is sure to cause problems and degrade society.

     And does.

Tuning: an iterative process

 

     I'm not certain of the exact origins of the use of the word "tuning" but it certainly does work within the world of music. Tuning an instrument or use of a tuning fork, we are concerned with narrowing the result down to the right point. Sound the tuning fork then pluck the violin (or guitar or ...) string. Is the sound from the string higher in pitch than the tuning fork ... or lower? Adjust the tightness of the string and check again. Slowly you will reach the point where your ear cannot tell the difference in the note between tuning fork and string.

     Tuning works for many different things. Although listening to a radio is becoming a rarer and rarer situation, it is once again a matter of narrowing in to the correct location. Move the tuning dial one direction and the signal becomes less clear. Move it in the other and it becomes clearer. The right place will give the best signal.

     Tuning can also be used for various business practices. If you want to maximize profits then you want to maximize the profit/item times the number of items you sell. If you increase the price you will likely reduce the number of items you sell and you will probably sell more if the price is less. There is a "sweet spot" where the price gives you the greatest profit for a given number of sold items.

     So, tuning can be used for physical processes such as sound or frequency detection. And it can be used within maximizing profits. In what other ways can tuning be found in everyday life? How about budgets? We know that budgets are a matter of balancing income with outgo (recent blog). But in order to refine the budget, some things may have to be reduced, or eliminated, to make it balance. Perhaps your rent goes up -- something else has to go down.

     Menus, or diets, also have to be tuned. Factors involved include budget (and inflation), carbohydrates and other nutritional components, and variety and desirability. When I was growing up, my family was on the edge between lower income and middle income (sometimes one side, sometimes the other side) and there was a long period during which we had butter beans and ham hocks (hard to find them in the grocery store nowadays -- they were sometimes free) for six dinners a week. It took me years before I could stand eating a butter bean. But it was necessary. We needed food and we had very little money.

     How about physical comfort? I really need cool nights to sleep well. But cooler nights in the summer (depending on climate) aren't free -- how to get to that balancing point where I can sleep adequately but not blow the budget?

     I am sure that you can think of things that have trade-offs. Any such item will undergo a period of tuning. And that may change with time as components shift.

Second-guessing: (or even third)

 

     If you are on social media at all, you have been presented with survey questions -- usually in the form of multiple choice. Sometimes the choice is "obvious". Sometimes one or more choices are unclear -- they could mean more than one thing. Sometimes you want another choice (sometimes they will say "other" and ask you to clarify in comments). But, what happens after you have made a choice?

     Often, the "survey" will immediately return the current statistics with what percentage of people had which answer marked. Sometimes, they only tell you results after the deadline for participation has passed. Of course, there are those times when your survey (or suggestion in the suggestion box) goes into a black hole and is absorbed by the universe and you never find out who answered what.

     But, let's say that you DO get the results back. You have picked the most popular choice. What do you say to yourself? Is it something like "of course it was that one, everyone should have picked that one -- it was obvious". What if you picked the least popular choice? Is your reaction a lot different? Is it more like "hmm, why did I choose that one, everyone else must have known something I didn't. I better investigate that choice and see what it really means." And, having a choice in the middle of popularity isn't so bad -- you neither puff up with pride nor do you try to find a rock to crawl under.

     It isn't always so obvious. Most of us have encountered the phenomenon of "buyers remorse". Once upon a time, I wanted a new car. I researched and looked around and finally chose a car (which I loved until it was totaled in a car crash). I was mentoring someone, at work, at the time and they purchased a new car (a totally different model than what I eventually chose) about a month before I made my purchase. They saw, and rode in, my choice of car -- and went off to buy one for themselves, trading in their one month old car. That was a very expensive change of mind.

     Buyers remorse can fall into a couple of variations. One is, as above, when you decide afterward that you should have chosen something else. Another is when you purchase something and it did not lead to ultimate bliss as you, or the salesperson, talked you into believing. You purchase a game that you ended up playing for a week and then never went back to. A glass that you used once and then put up on a shelf to never be used again. We have a very consumer-oriented economy and society, so most people are in the process of deciding what to buy -- and rarely in the process of deciding whether or not to buy.

     Of course, making decisions is not always about things. Something that I have heard is that "a good executive makes decisions and a great executive makes good decisions -- eventually". A captain of a ship who cannot make a decision will eventually end up on the rocks. One who makes decisions, but not necessarily good ones, will keep moving around to avoid the rocks but the journey may be a rough one and the destination will continue to change. But the captain who makes a decision and, if it proves to be a poor choice, admits it and changes course as soon as it is prudent -- will get to a predetermined destination in an expedient fashion.

     Note that that great executive has to do a series of things. They must make decisions. They must continuously evaluate the results. They must determine when there is enough evidence to say whether it was a good decision or a bad one. If good, full speed ahead. If bad, clean up from the mistakes (including possible apologies) and make the next best guess of a decision. No executive truly knows, for certain, that a decision is a good one (though, if not listening to others, they may make what appears to be an "obvious" bad one). It is what they do afterward that determines their quality.

Walking the Shadow Line: Make a strength of your weakness

 

     I have always had fun with personality tests. Do I believe in them? Maybe. They can give you a doorway into examining yourself. Just don't let them persuade you to put yourself into a tidy box. None of us are that tidy. If a test says you are A or B -- it really means that, on that day and in that environment and with known others evaluating the results, you have answered in a way such that the result is A or B. The people who administer the Myers-Briggs Type Inventory (MBTI) say specifically that your results may vary depending on when you take the test and your environment. If you are doing the test for the office, you should take the test in the office.

     At any rate, whether you think the MBTI (or Enneagram or HEXACO or Berkman or ...) is valid or not, at best it can only give you the DOMINANT aspect at that time and in that environment.

     For example, I am INF/TJ in the MBTI. Each of the four attributes (Introversion/Extroverstion, iNtuitive/Sensing, Thinking/Feeling, and Judicial/Perceiving (some say Judging -- I think that word carries too much implied baggage)) are the labels on the ends of four sliding scales. Sometimes, along with the acronym that you end up with, they will give you a percentage score as to just how strongly you tend towards that attribute. For myself, I usually test right in the center between Feeling and Thinking, so I usually put INFJ down if it is asked for but the descriptions for an INTJ sometimes match me.

     Not only does your environment make a difference in your results, but the people you are with will affect the way an attribute (assuming you believe in the validity of such -- not all do) manifests. For example, I am moderately Judicial. I aim for the goal, the result, the destination. My wife tests out as a moderate to heavy Perceiving personality. For her, it is the journey that matters, learn and enjoy on the trip and arrive, or not, depending on whatever. When we are together, the urge is for me to move farther towards the Judicial endpoint to "balance" her Perceiving nature. I move in to "take care of the details" while she looks out the window and says "stop here, I want to look at those flowers".

     But, a large part of being in a relationship is to value what the other brings with them. Perceiving brings along with it an ability to be flexible. So, over the years, I have deliberately worked on myself to appreciate the value of being flexible. Is that my inherent, comfortable, state -- no. But, I can work with it much better than I could 25 years ago.

     And that is true for each of the sliding scales or whatever personality inventory you might be taking. All values are a strength within a certain situation. An Introvert might find it much easier to sit in an office and focus on a bunch of data to come up with useful results while an Extrovert may find it so easy to present the results to a bunch of people and bring energy to the group and the project.

     Without conscious work on being able to incorporate the "other side" of the personality scale -- each is weaker than they could be. That introvert may not be able to even consider the idea of presenting results within a group of strangers while the extrovert finds the idea of sitting down, by themself, with a bunch of data, and no external interactions, to be boring to exhaustion. But an introvert who has trained themselves to TEMPORARILY (within that limited time and situation) make use of the extrovert's characteristics will be a much more balanced, and strong individual (and, afterward, probably will need hours in a room by themselves with a good book). Someone who can work through the data, find the results, AND present them to a group in a comfortable manner? I know -- hire them!

Train Wrecks: When you can see it coming

 

     We have all encountered it -- though it is much harder to recognize when it is concerned with our own actions. We see something happening on the street, in the office, with our children. If the sequence of events does not change (and, often, what we observe is something that is very hard to change) then problems are going to occur. Possibly very bad ones.

     I call these "train wrecks". The name comes out of seeing a car (hopefully already abandoned) stuck on the train tracks with the train coming along. If I am watching a movie at home and I see a train wreck developing then I will often start pacing the floor. I may even turn the movie off, or pause it, to avoid seeing it unfold. (If watching in a movie theater, I grit my teeth and just wait for it to be over -- an advantage to going to see the movie at a theater.)

     The same thing happens when I am reading a book. I see an impending train wreck and I close the book. It may be a week or two before I accept the issue and I can turn the movie on again or open the book. If a book has multiple train wrecks in it I may abandon it and never complete it.

     Why do train wrecks bother me so much? Train wrecks occur in many successful movies and books and television series. It appears that it does not bother many people nearly as much as it does me.

     I have decided that it is an occupational hazard. I have been in the computer programming/architecture/management field for 45+ years. A large part of success in the field is structured thought and organization. Computers, and microprocessors, are very, very stupid -- they do EXACTLY what you tell them (barring hardware problems) -- they just do them very, very quickly. If you structure the program properly then it can do a LOT of tiny little simple things fast enough that it can appear to be doing complicated things quickly.

     So, how does that relate to not being able to watch train wrecks? Having a brain that has been taught that if A causes B then B will always come after A means that when I see A, my brain starts saying "B! B! B!" I start wanting to yell at the book or movie screen. "Don't do A. If you do then B is going to happen." Maybe it is a bit more complicated. Maybe it is "If A exists and choice B is taken then result G will happen. If choice B is not taken then result J will happen." So, I'll start screaming "take choice B!"

     But those characters in the movies or within the books never seem to listen to me.

     So, what about situations where the person CAN hear you? They potentially COULD take choice B if they wanted. More often than not (or, at least, so it subjectively seems) they ignore you. As a parent, people tend to tell you "they have to experience it for themselves". So your child doesn't take choice B and you have to be prepared to help clean up the mess.

     Occasionally -- in movies, books, or real life -- not taking choice B will NOT lead to result J. Maybe some outside event occurs (in the script or pages) to change the outcome. Maybe you were incorrect in analyzing the base condition, A, and therefore the results from the choice differ. But even if the result turns out different than expected you still spend the time waiting for the train wreck.

     So, please -- protect me, and the people around me, from train wrecks. Consider the consequences.

Back to Basics: Budgets

 

     Among the many things I wish my children had been taught, while in school, to prepare them for life in the "real world" is the aspect of budgets. We are fortunate enough to currently have adequate money to not have a very strict budget but it has not been many years (about ten, if I am counting) when I had to add the price of each item I put into the shopping cart, at the grocery store, to make sure I did not exceed our budget for food. It was not enjoyable.

     But, my (now 24 years old) middle son asked me how does a person make a budget (this was in response to my reply to him when he, once again, wanted an "advance" to take care of a birthday present that he had known, for a long time, was coming up). I just had to blink, give him a brief reply, and then hand him a copy of the household budget so he had a real life example (and so he would be aware of just how much money was going to where).

     A budget is very similar to a diet or balancing your accounting records (personal or business). You want the outgo to not exceed the income. (For budgets, it is okay for the outgo to be less than the income <smile>. For diets, it is the opposite.)

     The first, easiest, thing to determine is how much income you have. This includes all wages, automatic dividend dispersals, pension checks (including Social Security in the US), and such. Since (in the US) one has to come up with such every year when taxes are due, this should not be difficult.

     The expenditures come next. These are divided into fixed, recurring, and discretionary spending. Fixed items are those which have the same, known, amount each month (or day or week depending on how small of an interval for which you want to budget). Fixed expenditures includes mortgage/rent, Internet bills, insurance bills, streaming subscriptions, and so forth -- amounts that do not normally change between months. Note that it is always possible for a fixed item to increase (rarely decrease) as rates go up. Large businesses (and wealthy individuals) differ in that they have more possibilities for financing and investments but, otherwise, they should have the same budgeting requirements.

     One fixed amount that I suggest to have present, if possible, is to have a "set aside" amount of money that goes each month into savings, certificates of deposit, investments, work or national savings plans. During working years, as I talked about in an earlier blog, it is wonderful if you can have enough money, in easily accessible funds, to supply your household needs for six months. It is still a good rule in retirement as it can allow you more flexibility in when/what/how you extract money. This fund (even if it is not enough to support six months) can also be used for unexpected, larger, costs -- automobile repairs, dental work, medical costs (in the US).

     Recurring expenditures vary in their amounts but occur every month (or every regular interval, we pay for water/sewage once every three months). Our largest amount in this category is groceries. It is also the category that has gone up the most in the past three years since pandemic burrowing. I estimate our grocery bills have gone up 25 to 30% (which doesn't agree with official inflation numbers but that is another story).

     Since the exact numbers will vary, it is useful to include a maximum average amount in your list of expenses. Our gas/electric bill is lowest in Spring and Fall when we often are able to turn off the heater/air conditioner. It is highest in Summer as our need for cooling is greater (and more expensive) than our need for heating. This will vary upon personal desires and geographical location.

     The final category is discretionary spending. It is so very tempting to make this zero ($0.00) but it is not realistic in the long run. Try to be honest with yourself. How much do you need to buy books each month (never enough)? Or "on demand" or theater movies? How many pairs of shoes or new shirts?

     Now it comes down to arithmetic. Add up all of the items in the three categories. This is how much you would like to have to spend. If the amount is less than income, rejoice and allocate more to savings/investments. If the amount is more than your income, look at each of your discretionary items and see which ones you think you can honestly reduce for the long term (most of us can reduce an area for the short term). Add them up again. Look over discretionary once more. Try again.

     If cutting discretionary spending is not enough, then look at the maximum averages you have set for recurring amounts. Can you set the thermostat for heating two degrees cooler? Or three degrees warmer for the air conditioner? Do you really need four separate streaming subscriptions? Cut and add.

     Still not in balance? Here you have two main paths. If you have sufficient savings/retirement investments to last as long as you expect to live, you can withdraw that deficit each month (this is when you determine the amount of deficit budget to pull out from savings). That is one path. (For us, during a 15 year period of declining income, we remortgaged twice to pull out equity).

    If that is not possible, try to get a better income job (or, if required, a second job). Prepare to move into a smaller living area or one in a "less desirable" neighborhood. You have to either reduce expenses or increase income (or both).

     Of course, you can do as many do and pray for something to change for the better. And it can happen -- but counting on it may put you into a situation where you are unprepared and that may mean drastic changes (homelessness, food banks, etc.).

     And that is the world of budgets. Income equals outgo. Of course, budgets only work if you keep within the numbers you have determined (don't spend more than allocated and continue to have the expected income).