You know you are supposed to put a budget together, right? Have you lined up this year in numbers and dollars?
Budgeting is terrific because it gives you something to shoot for – the income and the expenses. The problem is that once you put a budget together, you might want to treat it like stone tablets brought down from a so-called holy mountain. Remember that your budget is just a guess. It’s a hope, and it’s OK that your fingers are crossed.
So, lighten up about this budgeting thing. Set your income and expense goals. We are halfway through the year already. Why not take a swing?
You can’t do it 100 percent right, meaning you will never guess exactly what is going to happen. You can’t do it wrong. Just enter the numbers in your accounting program – or in a spreadsheet or on a columnar pad – for the expenses you think will happen, what you want to incur. Then, put an income goal for higher that that.
Here are three tips to get you started:
• Income greater than expenses. Sounds easy, right? Use your budget to make some good things happen in your life. Record income and expenses as they happen. The goal is to end each month with money left over. On a weekly basis, take a look at where you are – actual to budgeted. Warning: An up to the minute review of your financial position can be obsessive. Watch yourself. If you are upside down – spending more than you are bringing in – it’s time to play.
• Play defense. Spend less. See if you can go a whole day without spending any money. Pick one or two expenses that will have to wait until next month. Don’t threaten your credit ranking here, just be creative. The idea is to spend consciously, not torture yourself.
• Play offense. Make more money. It’s exhausting to continually tighten the belt. Figure out how to increase your income. Sell stuff on eBay or Craigslist. Roll coins. Pitch a project at work and present it to your boss, including a bonus for you for successful completion.
How about starting a business?
I love service businesses, especially dirty jobs. Hauling, cleaning, pet and kid care – the options are plenty. Offer virtual assistant services. Write for trade magazines and blogs; some will pay for industry expertise. Check out Etsy.com. Google “truck businesses” for cool ideas (
see this cover story on food trucks).
Put a simple business plan together, including a budget for your business, and decide if it makes sense for you. Take note: The least secure financial position is a job. You can lose a job in a heartbeat. A business could be your best bet to build wealth. And you reduce the risk if you start your business while you have a job.
No surprises here. You know that if you want to lose weight, you have to burn more calories than you eat. If you want to make money, you have to spend less than you make. Pay attention and decide: Am I at the effect of my situation or can I change it?
Here are three more tips:
• Siphon and invest. Put payments and investments on autopilot. That’s classic advice, most famously shared in “The Automatic Millionaire,” by David Bach.
• Treat yourself with the windfall. You might have items on your budget that you just kick in when you have a great month. Shoes? Toys?
• Buy a lottery ticket. It’s only $1, once a month. Why not? Put a budget together for what you would do with a big win.
Have fun with budgeting. Use your budget to set goals and expand your wealth. Be willing to play offense and defense. And take a few risks.
Sure, you could buy a lottery ticket. The better bet? It might be a simple, profitable business of your own.
Ellen Rohr is an author and business consultant who helps entrepreneurs start, fix and grow their businesses. She conducts a monthly webinar, and her books include “Where Did the Money Go?” and “The Bare Bones Weekend Biz Plan.” She can be reached at ellen@barebonesbiz.com.[[In-content Ad]]
