Budgets seem to be a necessary evil in the 21st Century. In recently developing a financial plan for my life, I share what I've learned about the dreaded B word.
I love seeing clients that have multiple savings accounts for a set purpose. I also love seeing clients setting money aside for their taxes. And I love budgeting. My love for these things has nothing to do with being an accountant (well…maybe just a little bit). Most of it comes from knowing that these clients have their finances under control and with that, ittakes a huge burden off of their shoulders.
For me, this realisation was only recent as I started putting together my own budget and financial plan. In doing so, this has allowed me to stop wasting money on things that aren’t important, and start spending it on things that matter – like going on a holiday, or being able to start planning my wedding.
Here’s what I’ve learned so far.
1. No More Surprises
I absolutely hated when the rates notice came in the mail, for some reason it always caught me off guard. Now I see it coming – and when it comes I smile because I already have that money set aside. Creating a budget completely changed the way I felt towards managing my own finances and took the stress away when the bills came in. And that is one of the key benefits of developing a budget, it changes our emotional response when we have ‘unexpected’ bills like rates, or insurance, or registration arrive on our doorstep. We go from being unprepared and riding the money rollercoaster, to taking a more leisurely path without having to worry about what might be around the corner.
Budgets don’t have to be about giving up the things you enjoy, or being frugal, instead they're about living a life you love, but a life you can afford. It’s about prioritising and determining where you would rather be spending your money, and how you can manage your finances to reduce stress. Practice prioritisation so you have money for what you actually want, and the money you actually need, all without the ups and downs that come along with the journey.
3. Overcome What a Budget Has To Look Like
This probably isn’t the first time you’re considering what it might look to have a budget, maybe you’ve even had budgets in the past but for whatever reason nothing has stuck. It might just mean rethinking what a budget is for you, and where it’s going to help you the most. Spending money is a personal choice – what makes one person happy, may not make another. It's the same with budgets. There are plenty of ways to create a budget, naturally for me this meant an Excel spreadsheet, but it could be visual, it could be through an app, or even setting up a Xero cashbooks! It’s not important what it looks like, only that it makes sense to you and helps you stay on top of your money.
So, what is your plan? Touch base today if you'd like to get on top of your business's finances.