So you want to know how to make a budget for your home business?
You can make a budget as detailed as you like however, I like to keep things real simple but functional with a personal budget worksheet.
If it is too time consuming I don’t bother keeping it up and well – the point about why you want to know how to make a budget - is to simply help keep your finances on track.
You’ve tracked you daily spending habits using a simple home booking system, now we will look at pulling your regular spending into one simple page.
Create a simple chart on one page of your personal budget worksheet. Along the top create columns for each month, January – December.Down the left hand side in the first column list your expenses e.g. gas, electricity, insurance etc.
At first this may take a bit of time to actually pull all the needed information together. You will need past bills so you can see the due date and the average total of all expenses in each category.
Write the amount due under the column for the month it is due. So if your electricity bill comes in quarterly say, Feb, May, July, October you would write the amount under each of those months. You will then know how to make a budget using the total monthly expenses.
Do this for all your expenses. Do a total for each month and then for the year. See an example of a personal budget worksheet below...
Know your Tax deductions
To know how to make a budget, it is important to make it your business to know what you can claim aslegitimate business expenses. Why is this so important? It is cashflow.
Done? Great. That wasn’t so hard after all – but hey it will be worth it.
I hope you now understand how to make a budget and that your total:
Money In is MORE then your total Money Out!
If it's not, you will want to find out how you can set up a simple debt reduction plan., Again you will be surprised that once you put your mind to it, knowing how to make a budget really is simple and will help you have a successful money management system. Ok. Now that you know the state of your Money Out. Let’s look at what you want for the future.
List what you want – Your second budget page.
If you aren’t specific about want you want – you won’t get it!
Here’s what I do, usually at the begging of each year. Again, for this to work you put in as much detail as you choose, however what works for me is keeping things simple.
I make a list on my personal budget worksheet under different categories for example, Each bedroom, lounge, kitchen, home office, then bigger items might be, house, car etc. See sample budget worksheet below....
Under each of these headings I write the specific item I want. Example - for one of the boys rooms I want a new bedspread or doona cover
Then beside each of these items I write approximately what I think it would cost.
Here is the REAL crux of how to have a plan that works; give a priority beside each item e.g A, B, C with A being most important/urgent.
I put these two pages in my diary.
Often when I come back to check some months later to see how I’m going I am surprised to find that I have already received what I wrote down! Ahh! …is that a clue for you?
Dealing with the shortfall
When you know how to make a budget you can easily see if you don’t have enough money coming in to cover all the money going out. Ok. Couple of things you can do.
You now know how to make a budget using your personal budget worksheet that can also be used for your home business.
Knowing how to budget also allows you to move forward towards your financial goals with proper knowledge to make informed decisions on your finances.
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