Budgeting: How to Get Started

It’s your dose of business logic and advice. My background is in business economics and I have been in the financial world for over 7 years. I’m not a banker, though. My position resides in the world of community relations. Within this position I’ve been responsible for a number of things over the years; reading over 800 grants a year, analyzing financial data, reviewing budgets, tracking trends, writing technical manuals, researching organizations and so much more.

As I balance my life between the artistic and the financial worlds, I find that many of my creative friends struggle when looking at their numbers. They have a hard time budgeting, tracking their data and understanding how to price for profit.

You may be thinking, “Yes that’s me! I can’t do this number thing.” If you can do simple addition and subtraction, you can budget. Let say you started your business in Sept 2011. You now have six months worth of data to help you plan for the remainder of year. The question is really: where is this data?

If you are a paper person (I won’t ask why) you most likely have a pile of receipts stashed in a box under your desk. Pull out the receipts organize them into categories (utilities, marketing, office supplies, products, travel, gift given, postage/shipping, etc.), put each categories into its own envelope and then tally the total for each category on the outside of the envelope. These numbers become your base expenses when planning the remainder of this years budget. Since you have six months worth of data, you can double the totals and guessimate what your costs will be for the rest of the year. Goal for 2012: find a program to help you track your expenses. If you like envelopes take the concept digital, check out Mvelopes.

If you manually enter your information into a spreadsheet program, then you may already know that you can find your statements for your checking and credit cards online. Most banks have online banking options that allow you to download your statements. Use this information to help you calculate your expenses. Programs such as QuickBooks, Wave Accounting and a bunch of other programs can help you budget, run income statements, show cash flow and balance sheets. As you become more aware of your numbers you can better execute your business. Check out this article on other money management programs and my previous post on free resources.

More financial goals for 2012:
– open a separate business account. Don’t mix personal with business
– don’t use cash (physical bills). Use your debit card. This method you can track and clearly see where the money is going.
– for every business purchase think to yourself- is it a need or a want?