Today, we’re diving into a crucial topic: budgeting. I’ve whimsically titled this episode/post "Don't Fudge It, Just Budget" because, well, I enjoy a good rhyme. Plus, it drives home the point—if you’re not budgeting, you’re essentially just guessing.

Why Everyone Needs a Budget

Whether it’s for personal finances or your business, having a budget is non-negotiable. Without a budget, you might think you have a handle on your finances, but in reality, you’re just winging it. A budget provides a clear plan for your money, ensuring you’re not left in the dark about your financial situation.

The Right Mindset for Budgeting

Approaching budgeting with the right mindset is crucial. See it as a tool that gives you control over your finances rather than a restrictive measure. This shift in perspective can make budgeting feel less like a chore and more like a powerful financial strategy. Think of it simply as a money plan.

Essential Budgeting Tools

I highly recommend EveryDollar which is an app that’s user-friendly and accessible on both phones and browsers, and perfect for both personal and business budgets. My husband and I use it to manage our finances together, making budgeting a seamless part of our routine. Other notable mentions include YNAB, NerdWallet, and Mint (although Mint has recently been discontinued). I can’t personally attest to the functionality of these because I haven’t used them myself. The key is to choose a tool that you’re comfortable with and is easily accessible, so you’re more likely to stay engaged with your budget.

Check Out My YouTube Tutorial

For those who prefer a visual guide, check out my YouTube channel which is just @financiallyadjusted. You’ll find a video tutorial on setting up personal and business budgets using EveryDollar. This will be a step-by-step guide to help you get started and layout a budget that aligns with your profit and loss statement categories.

Budgeting Frequency

How often should you budget? I recommend planning your budget three to six months in advance. This might seem daunting, but remember, your budget isn’t set in stone. It can be tweaked as circumstances change. For personal and business budgets, aim for a minimum of three months. Check in with your budget at least once a week to ensure you’re on track. If you’re a small business with fewer transactions, this might be easier to manage. For larger businesses, finding a workflow that suits your volume of transactions is key. You can enter larger lump sums throughout the month based on the totals in your P&L or you can choose to enter individual transactions more frequently. Do whatever works for you and will help you be more consistent with your budget!

Making Budget Check-Ins a Habit

Consistency is vital. Schedule a weekly reminder to review your budget, ensuring it becomes a routine part of your week. Whether it’s a pop-up reminder on your calendar or a task in your to-do list, find a method that works for you. Personally, I check my finances daily because I enjoy it, but once a week is a good starting point for most people.

Structuring Your Budget Categories

When setting up a business budget, organize your categories to mirror your accounting system’s profit and loss (P&L) statement. This alignment makes it easier to track expenses and revenue accurately. For personal budgets, the structure can be more relaxed, but it’s still essential to coordinate with your business budget, especially if your business is your primary income source.

Monthly Budget Reviews

At the end of each month, compare your budget projections with actual data from your P&L statement. This review helps you adjust your future budgets based on real performance, making your financial planning more accurate.

Building the Budgeting Muscle

If budgeting makes you cringe, stick with it. Many people find that once they establish a habit, budgeting becomes second nature. Most times, people think of budgeting as a limitation; however, it’ actually just brings to light your money reality and helps you to feel freer and in-the-know about your specific situation and what you’re able to spend. The more you practice, the easier it will get. Watch my YouTube tutorial to see how to set up a budget that works for you, and soon, you’ll find it’s not as daunting as it seems. Check out my free financial resources at https://www.financiallyadjusted.com/.

Thanks for reading this blog post! Remember, don’t fudge it, just budget. Your future self will thank you. Have a great day!

Disclaimer: This content is for educational and informational purposes only. Please consult with an accounting professional for direct advice based on your specific business situation.

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