Why do they? Why do they do that?
I think the questions above are smart questions. Why do you need to budget, especially if you are building your business as a small business owner?
Again, the smart question is ‘Why’?
For one, even if you are not a business owner, you should have a budget plan to follow..
The purpose of a budget plan is to be a guide for you to spend your money wisely accordingly to your financial goals and of course not overspend beyond your means.
And if you’re an entrepreneur, It’s a no brainier that having a budget plan and FOLLOWING the plan is key to make sure you have funds for your business strategies.
Because as business owners, we have business expenses right? We have financial goals we want to achieve. We want to live a better lifestyle. Have the finer things in life.
I think this isn’t really something to debate about if we should care to think about our budget. Of course we should!
As small entrepreneurs we should be more serious about this than non entrepreneurs do.
Because again, we have business expenses right?
So, here’s 3 tips
Tip # 1 – Add up your income
To set a monthly budget plan, you first need to know how much money you make. Every sources of income is necessary for this process.
Note: Be sure to write down the take home or net income and not the Gross income.
Tip # 2 Know your expenses
You should sit down and think about how you spend your money. The best way to do this is to calculate your expenses on a month. How much do you spend on a monthly basis?
Of course, different situations and circumstances will breed different results.
Your budget here should have a Fixed and flexible expenses category. But overall the budget must be flexible.
Fixed expenses are those that generally do not change, while flexible expenses are those that change from time to time.
Tip # 3 how much is left?
Simply subtract the expenses from your income. A positive result tells you are not overspending and is in fact saving some money, which is quite a good thing in today’s standard. Give yourself a thumbs up 🙂
Make sure to track your budget on a consistent basis. If you can’t follow your budget plan but you’re really trying to.. this only means that your budget plan isn’t feasible and flexible.
The only solution to this problem is to Redo your budget plan again.
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