Easy-Peasy Budgeting

Creative Common License

What does the pinup model have to with budgets?  Well, while researching for this post, I came in contact with Mr. J Money who authors the blog Budgets are Sexy and I just couldn’t resist catching your attention with a sexy 1950′s pinup.

And, no this is not an April Fool’s Joke.

Advice from the blog Budgets are Sexy

J Money’s site targets personal finances, but there are some relevant points that apply to most small businesses.    His advice is as follows:

• Track your spending for 3 months so you know EXACTLY what you spend and how you spend it.
• Create an emergency fund.  This is as important in personal finance as with small businesses.  As we’ve learned this year, you never know what is going to happen with the economy.  Spending on weddings is down significantly since last year, and people who have cash cushions are in a stronger place.  Sean Low of Preston Bailey Designs, Inc. recently talked on his blog about smoothing out cash flow to get away from some of the seasonal flux of our industry.
• Pay off all bad debt (eg. credit cards and lines of credit).  Debt has a huge negative impact on the cash flow of your business.  If you are paying off your credit cards (and the interest on them) you don’t have the cash to invest in your business.  Get rid of this debt as fast as you can and you’ll have the flexibility to grow your business in much more lucrative ways.

Budgeting = Goal Setting

I like to think of budgeting for my business as goal setting for my business’s expenses.  Ask yourself the following questions:

• What is it that I want to do with my money?
• What are my goals with my cash?
• What expenses do I have to pay each month?
• What expenses would I like to reduce?
• How much cash surplus (emergency fund) would I like to have?

By answering these questions, you’ll have a starting point for building your budget.  From here you can start to build your budget.

Tools to build your Budget

I like to use Excel spreadsheets or google spreadsheets to track everything.  Excel has some great templates that are easy to fill in:

BudgetSketch (www.budgetsketch.com) is also an AWESOME online tool that’s FREE.  It is also targeted at personal finances; however, it is easy to set up your accounts to reflect your business expenses.  It also allows you to collaborate with business partners and share your budget communication.

Bill Barnett and Dewayne Greenwood are the masterminds behind the program. And, I like the mission behind this business.  When I talked to Bill he said, “Dewayne and I wanted to create a simple, effective budgeting tool designed for one purpose only, to aid its users in creating a budget.  [It was designed] certainly not to make Dewayne and me rich at the expense of others. We look at it as our way of paying forward the lessons we learned about getting, and hopefully staying out of debt.”  What an awesome tool from these pay-it-forward guys!  (Thanks Bill and Dewayne.)

Did I mention that Budgetsketch is FREE?  (If it’s free, it’s me!)

What works for you?

The most important trick to budgeting is finding a system that works for you.  It might be paper and pencil or Quickbooks Budgeting Software.  But, find something that easy for you to work with… that you love… and that you think is SEXY!