What It Took To Make Me A Budget Believer
My husband and I said for years that we needed a budget. We try hard to live within our means and shun debt. We don't have cable. We don't have shiny new cars. We don't have a house that gobbles up 50% of our income. Yet, we never seemed to have any money left over at the end of the month--even after I scored a job that doubled our income! We had no idea where all of our money was going. The only thing we knew was that we weren't accumulating debt, so we assumed that our finances were fine.
When I decided that my goal was to leave my current job and start working from home, we were forced to run the numbers. With finances already so tight we needed to know what cuts would need to be made in order to make this goal happen. What we realized was that our spending was out of control! One month we spent nearly $1200 on groceries for a family of three. Once I picked my jaw up off of the floor, I set a goal of no more than $800 per month on groceries. Since I'm much more aware of our spending habits now, we spend much less than $800. We know where our money is going and how to make our money behave.
Something inside me changed when I could physically see where all of our money was going. I was shocked, embarrassed, and quite frankly, enraged. I realized just how wasteful we had been with our resources. I thought that I had been in control of my money, but I clearly wasn't. Success with money comes when you are in control of each dollar.
These same things hold true for a small business. It's easy to turn a blind eye to your spending habits just because you have money to spend. If you find yourself wondering where your money is going and why your business isn't as profitable as it should be, then you need to take a hard look at your numbers and create a budget. This way you'll know exactly how every dollar is allocated. In order to determine your budget, it is helpful to look into benchmarking as a way of gauging how much you should be spending on your expenses.
Budgeting is laborious at first, but once you put in the work you quickly realize how rewarding it will be for your profitability. It's an eye-opening experience! You can either be a slave to your money, or you can make it behave and work for you. When you're sick and tired of not being in control of your money, a budget will bring your finances back into perspective.
Do you need help with your budget? I can help! Contact me here.