What Budgeting Has Taught Me

Most of you know that I follow the common sense teaching of Dave Ramsey.  If you were not sure, you could have found out here.  My wife, Staci, and I have been budgeting pretty much since we have been married, almost 3 years.  We have looked at our monthly income, projected our expenses, and spent the money on paper (or Google spreadsheet).  I do not recall why we did it initially, other than it was recommended by Dave, but now, 3 years in, I see some added benefit to budgeting.

• When we budget together, we are forced to agree on our priorities in life.  I had a pastor who always used to say, "I can tell your priorities by looking at your planner/day timer and your bank statements." Staci and I are forced, every month to come to an agreement on where we invest or spend our financial resources.
• When you sit down and rationally plan your month ahead of time, your priorities change. 
•  My spending in golf has probably been the biggest change here.  I used to golf a few times per week, and since we started budgeting, I only go out on special occasions.  
• Another example is clothing.  This probably applies more towards Staci than it does me, but by planning out what we need for new clothing purchases ahead of time, we do not make impulse purchases that we regret later.  On the rare chance we do make a mistake on a clothing purchase, we have incentive to take the item back because our clothing budget is finite.
• When doing a 0 based budget, you cannot spend more than you make in a single month.  We have delayed purchases that we may have other wise jumped on earlier.  For example, the computer on which I am typing right now we had to save for.  With a credit card or in store credit we could have made an impulse purchase, but we saved for a few months, shopped around and got exactly what we wanted at a good price.  When you are spending future money it is easy to buy more than you need.  My sister, Jessica, told me that she was saving up for a Mac.  She wanted one for a long time, but now that she had the cash she wasn't sure if she wanted to empty her bank account for a computer (she already has a perfectly good one).  Saving up for something changes how you interact with it.
• When doing a 0 based budget, you also have to acknowledge that spending more on something also means spending less on something else.  We see this every month when one of us says, "we need to spend more on this" the other will say, "where is it going to come from?"  We can invest more, or pay down on the house more aggressively, but what will be neglected?

There is more, I am sure, but those are the biggest differences in the way I look at budgeting from 2007 until now.  What about you?  Do you budget?  If yes, why?  If no, why not?

Customer Service

There is a fine line people try and balance in business between customer service and cost cutting. In the past few weeks I have had personal experience with both sides of the spectrum and I want to discuss my experiences.

Side 1:
AT&T customer service.  I have recently had some issues with disconnecting my home phone, but keeping DSL service.  This was done because it will save about $12/month and we never use our home phone, except to hang up on solicitors.  Rather than an extensive narrative, below you will find some bullet points explaining my frustration.

• Call in procedure: There is a computer that asks you to say what you are calling about.  It gives some common suggestions like "I would like to pay my bill" or "Technical Assistance" but it is difficult to put a 3 word name on problems often.  I think I prefer "press one to pay your bill.  press 2 for technical assistance"
• They always ask for your account number, which I finally learned to keep with me.  When I didn't know it, they would ask for other information, but the response from that was always "I'm having trouble locating your information"
• I eventually just starting shouting "speak with representative" as soon as I got the computer voice.
• Once I did get a human, they would ask me for the exact same information that I just gave the computer, prompting the question, "why did I give it to the computer?"
• Every time I got transfered I would have to give my info again and again.
• I got the feeling that the operators really just wanted to push me off to another department.  I got transfered more times than I could count, and I always had to give my life story to the new person.
• There was no mechanism for the person on the other end of the phone to take responsibility for a problem and see it to conclusion.  When I was at Regions I would grab a customer's problem and see it to its resolution and the follow up  to make sure everything was good.  That level of service was either not possible or just not given to me.

That brings me to the other side of that equation.  Side 2: Chick-Fil-A

• 2 Weeks ago my friend Derek attempted to buy a breakfast platter for our Friday Morning Men's group.  They had dinner there the night before, so he ordered it, got confirmation that it would be ready between 5:30AM and 5:45 in time for our 6:00AM meeting.  He paid for it that night just to make everything go smoothly in the morning.  Well, apparently, the message was not relayed for the morning crew and it was not ready.  In fact, he was told it would not be ready until after 6, since it had not been started when he asked about it.  Frustrated, Derek asked for a refund (so he wouldn't be late) and just got some donuts.
• Derek received a call later in the week apologizing for the mix up and they extended the offer to host one of our meetings and provide breakfast for everyone on the house.
• We all (about 9) showed up the next week and ordered whatever we wanted, all on the house.  They were so gracious and obviously felt that they had a responsibility to make up for letting us down.

Its obvious which was a better example of customer service, but the interesting question is, which is better for the bottom line?  AT&T outsources much of their customer service all over the world, so the cost of the call centers is minimal, however, I have no loyalty to them.  If someone comes in with a better, cheaper, mouse trap, I'll be the first to move.  C-F-A, however, has endeared themselves to me, Derek, and likely the rest of the group of guys that were there that morning.  The next time we are trying to decide between Wendy's and C-F-A, I will probably lean towards the chicken sandwich.  But the benefits do not stop there.  Think about the employees who want to take responsibility for a problem.  CFA gives their people power to make decisions, even if it costs money, in the name of customer service.  That is great for morale and a good work environment.  I have been an employee that has felt like I was wearing handcuffs before, and it is not fun.  Most people want to help others, and it is rewarding to be able to do so.

What are your thoughts?  How would you run your business?