We may know it’s the right thing to do, but it regularly falls to the bottom of our “to do” lists.
Conny’s 7 Stages of Budgeting Procrastination
After many years of dealing with clients about this, I’ve identified seven common client reactions:
- Denial – “I don’t really need one; I know what I spend.”
- Pain – “Do I have to sort all those receipts?”
- Bargaining – “I’ll be better about organizing this next year. How about if we estimate for this year?”
- Boredom – “I can’t believe anyone likes to do this kind of stuff.”
- Organization – “I’ve scanned everything. Now what?”
- Outsourcing – “There has to be an app for this.”
- Acceptance – “I know this will help me to save money and realize my financial goals.”
The trick to successful budgeting is to keep it simple and handle it in a way that fits in with your lifestyle.
The first step is to know what you are earning and spending now. Here are some easy ways to keep track of what you are doing:
- Use a credit or debit card for as many purchases as possible. That way you have your expenditures all on convenient statements, rather than sorting through hundreds of receipts. And you’ll be able to download the transactions directly into your accounting software.
- Quicken Home & Business is a good example of a software program that will help track your solopreneur income and expenses easily. And, with their download features you can import all the transactions from your bank, investments and credit card accounts automatically.
- Quickbooks Online makes tracking & keeping business records easy. It also allows you to set up budgets & get reports about how well you are doing in meeting both revenue & expense goals.
- Mint.com is an online service that aggregates all of your accounts and transactions in one easily accessible place. For those on the go, it can make life much easier and take the pain out of this task.
You Have a Budget, Now What?
Take the information you’ve gathered & review it. Use it to project out the next 12 months and create a new budget for your business that shows you the way to make a profit. See where you can cut expenses or increase revenue to produce a better bottom line for your business and yourself.
Be realistic – don’t put in revenue figures that you can’t reasonably meet. And do the grunt work – look at each customer & estimate how much you can earn from them in a year. If you don’t know, figure out where get the information you need to do so. Be sure to take into account that you will lose some customers and that you’ll have to find new ones.
The Bottom Line Counts
The truth about budgeting is that it is a guidepost. You won’t hit every line item exactly right – but if you use it to frame what you expect your business to produce for you as net income, it’ll help you stay on track. So be sure to reference it monthly. Check to see how you are doing on both the revenue & expense lines.
The chances are that once you actually see how & where you are spending your money, you’ll be really surprised. Fortunately, technology really can help make this process easier.