Budget is not a bad word

Just say the word “budget” and people change the subject. Their eyes glaze over.

Budgets are useful for personal and business purposes and don’t have to be some giant detailed document that rules your life. It’s a guide; a plan; and it’s certainly not cast in stone. A budget reflects what you think/hope/want to happen. It can help you make decisions – whether to spend or not your money, look for another or additional job, or raise your prices.

Let’s create a quick budget. Grab a piece of paper.

Write down all your fixed expenses for the month. Examples would be rent, insurance, utilities, software subscriptions, loan payments, etc. Include amounts put aside for equipment purchases and taxes.

Now write down your best estimate for your variable monthly costs. These would be merchant and/or bank fees, independent contractor fees, continuing education, office supplies, salaries and travel expenses.

Total up all those numbers you just wrote down. That’s your “break even” point; how much you have to sell just to keep the doors open. Now add in how much the business should be paying you each month (if not already added in above).

If nothing else, just writing down a quick budget like this can quickly streamline and prioritize your to do list.

Take a look at your accounting software to see if it has a budget feature. If it does, enter the numbers from the budget you just created. This will allow you to run budget versus actual income statements which can be very helpful. And don’t be afraid to change your budget. It’s a tool, not a ball and chain.

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12 thoughts on “Budget is not a bad word

  1. Crystal Pina

    I do very well with budgets. My husband and friends joke that when I say I am broke, I always have money. Really, when I say I am broke, it’s because I’ve spent what I allotted myself to spend – not that I have zero dollars left.

    I think most people would do well with a budget if they stopped looking at it in the way you look at a diet – like you are denying yourself the good stuff.

  2. Jody Post author

    So true! A budget is choosing how to allocate your dollars and should never prevent you from properly running your business. It’s important to establish a reasonable budget. Don’t set yourself up to fail.

  3. Jane

    Always good to be reminded of going back to the balance sheet and reviewing the numbers side of the business plan!

  4. Kemya Scott

    Great post Jody. You made this super easy and fool proof. Budget is not a bad word, it’s only scary if you don’t do it! If you don’t know what money you have coming in and going out, you’re setting yourself on the path to the poor house. No thank you!

  5. Candy Messer

    Great info! I have been sharing the same types of tips with clients, but it is sometimes hard to get them to do it. They think it’s too hard, or maybe they just don’t want to have to look hard at their numbers. Head in the sand is sometimes easier for them. Thanks for sharing!

    Candy Messer
    Affordable Bookkeeping and Payroll Services

  6. Jody Post author

    Many business owners over think their bookkeeping to the point of not doing it. Keep it simple works for accounting too!

  7. Blake Ashley Freedom

    AAAAHHHH! Budgets!!! Hahaha I’m totally one of those people :-). But it is something that will help me move toward my goals more easily. I feel like taking authority over my finances will really help me step up into abundance. Thank you for this simple reminder that it doesn’t have to be so darn hard! I’m bookmarking this page! Love your site title by the way – how creative! Great tip Jody!
    Blake Ashley Freedom
    Body Image Expert + Intuitive Tapping Practitioner
    Free Tapping Training @

  8. Sheri Kaye Hoff

    Budgeting is a must practice for business. That way you know when you have dollars to spend on training and development which biz owners put off because they feel – they cannot afford it- but when you budget and allocate the money- it is there and you are investing in yourself and your skills
    Dr. Sheri Kaye Hoff, PhD
    Life, Executive and Small Biz Coach

  9. Jody Post author

    Dollars to invest not in training and development but to replace technology. Laptops, phones, tablets, etc are not cheap. I try to get clients to set up a separate savings account just for buying technology. It’s pretty hard to run a business with outdated, barely functioning equipment.

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