This is something that is very important and every entrepreneur should know and do!
Having a budget does not have to be a bad thing. It is actually good. It allows you to be in control of where your money goes and helps you to feel empowered. I know a lot of people get worried or stressed when they hear the “B” word, but I am here to share my 5 reasons why you need to budget. It’s easier than you may think!
Reason 1 – It allows you to set and reach financial goals:
If you have a goal in your business to hire team members, travel more or run workshops out of country you need to set a budget so you know where your money is going, what you have coming in and where you can make changes to reach your goals.
Think about how empowered you feel or will feel once you reach those goals.
Reason 2 – It will help you to even out the highs and lows in your finances
Basically – this is cash flow. There are different times during the month that you will have more expenses come out then another. Some people have most, if not all of their expenses come out at the first of the month. Some may choose the middle of the month. Knowing those high and low times allows you to plan and know when you can do certain things. You may even need to find ways to increase cash flow during high times so it’s not as stressful.
Reason 3 – It sheds light on bad spending habits.
Don’t get too upset or feel ashamed, we all have these from time to time. This can be applied to personal or business. When you have a budget, it sheds the light on the things you are overspending on. It’s easy with online shopping, quick trips to the store, eating out. The list goes on. This can also help you to see if you are paying for something you are no longer using. You may have even forgotten you have a certain expense. If you have not used something in 30 days or longer, it’s time to get rid of it.
Reason 4 – It allows you to plan for future spending
You’re allowed to spend. You need to reward yourself for the hard work – but, you need to plan for it. If you want to travel, want new office furniture or any other big purchase, you need to plan. In your budget, allocate a certain amount of money every month to go towards your spending.
Reason 5 – It gives you peace of mind
This is the biggest reason of all in my opinion. Budgeting gives you peace of mind. How? Because you know what is going on with your numbers. Budgeting does not just include all your expense. Every month you should be listing your income as well. You need to know what will be coming in so you can tell if you need to start looking for ways to bring in more income.
We don’t need to be stressed about money and having a budget will help take the stress out. You have your non-negotiable items, the other things you can add in and adjust when needed. Look at your budget at least once a week. Make sure everything is coming in and going out as it should be. Having a budget allows you to make more sound business decisions.
You can check out this video where I talk about these reasons as well and why I think EVERY entrepreneur should have a budget!
What’s holding you back from using a budget and getting in control of your money?