A monthly budget lets you know where you stand with your finances so you can easily aim for where you want to be financially .
Most budding entrepreneurs assume having a monthly budget is impossible because their income is unpredictable, however, this is untrue. Knowing where you stand financially is crucial for achieving goals , monthly budgets are quite easy to put together, it’s all about tweaking it over time, till you are able to find what works.
Here are tips to help you with this
- Create your monthly budget, just before the month starts.
- Look through your accounts to determine what your lowest monthly income has been ( If you are new in business and don’t have any thing to refer to, feel free to estimate).
- Build your budget based on the lowest monthly income.
- Put down your various categories and prioritize them putting your basic necessities as top priority ( make sure the ones with high priority are needs not wants). Basic necessities include food, shelter, clothing, transportation. Feel free to list all categories first before prioritizing just be sure to make the basic necessities top priority, then you can include other expenses. Your arrangements don’t have to be perfect from the start, you can make adjustments as you go along. Create a category for miscellaneous expenses to accommodate unexpected expenses that can pop up during the month
- If along the month, you rake in more money than you expected when creating the budget, simply add to the budget before spending; that way you are able to make adequate plans before spending it.
- Create a fund for the “rainy days” , when you make extra income than expected, put some of it in a fund dedicated to”rainy days” . There will be months in business when your income will exceed your expenses. At times like this , you can draw from this fund to balance it out. This provides a cushion for you especially at times when business is slow or you are unable to work as much.
- Keep using this template for the months ahead, it does not have to be a perfect budget from the start, you can always make adjustments that suit what you are trying to achieve as you go along. It is possible to under allocate or over allocate funds to particular categories initially, you can always fix this as you go along. It usually takes about 3 months to adjust and figure what works for you (try not to give up till you get it right) .