Money management is necessary to run a smooth business. It helps you track where your money went to and how you can plan on things that involve money in your business. Moreover, money management can help you run your finances at large not only the money in your business.
This is the most interesting part of the episodes we have posted so far because it talks about how to understand, plan and strategize ways of managing money. Paying attention to this post is very important because the level of your business success depends on how much you understand and handle the money that comes in and go out of your hands. You have a goal you want to achieve in your business. There is a level of success you want to attain and part of the things you need to put in place to realise it is a financial knowledge.
- Financial plan
Financial plan is a document which has a person’s current money status and long-term
monetary goals, as well as steps to make those goals a reality. Having a financial plan is a good way to document your plan alongside the funds it requires to realise it. Writing a financial plan does not require you to be some pro, draft something understandable to you which contains all the necessary sections needed for you to achieve your financial goals.
What is budget or budgeting?
It was around the last week of September 2021 when I came to this topic of budgeting in this post. I remembered that I have not draft any budget for the next quarter of the year. I quickly minimised the Ms word and began to work on my budget and I return to this training after finishing the budget. Budgeting has saved me from unnecessary spending and telling my story is like a testimony for me. Do you budget? Do you want to start budgeting? Your own testimony is on the way once you embrace the practice of budgeting. Now, let’s learn more about budget.
A budget keeps you aware of the amount of money you get and also the amount of money you could spend over a period of time. You can make a budget in your own style to make it easier for you to understand. You can do it as a list, table, a tree etcetera. As a self-employed, you should not combine your personal budget with your business budget. In addition, do not make your budget static, when the need arises to buy something outside your budget, find a way to adjust the budget to accommodate the emergency. A budget should not restrict you from getting some unbudgeted items. A budget helps you to control and maintain your expenses within your earnings. It also helps you to device plans on how and what to spend your money on. The purpose of budget is not to make life uneasy for you. Therefore, if you do not budget before now, start it gradually and little by little you will get familiar with it and life would get better.
Practicing act of budgeting is important for everyone. Before I learned how to make a budget and stick to it, I suffered financial problems. In school, daddy sends me money whenever I asked but, in a clap, I had spent it all. What did I do or bought with it? I couldn’t explain. I was back to the uncomfortable zone of broke again and what next? Thinking of how to do another pity and hungry voice for daddy so that he sends money ASAP. I do not know if I am only seeing what I want to see in this case of budgeting, but I observed this kind of unbudgeted spending with other students as well. It is not that the money we have cannot sustain us for a specific period of time, it is the lack of the application of budgeting that takes us back to being broke without any money sometimes. At first when I start to budget, it was not easy because I had to force myself to refuse the urge of buying what is not on my budgeted list. I was in my room one day when a woman came to advertise some really beautiful dresses and Aunty Saratu was now following a strict budget. I was in a tough situation because I love gowns, I want to buy one and on the other hand, I want to control my spending. But I will tell you something. I bought that dress and I acted as if I did not do anything. When that voice asked me “why did you not stick to the budget?” I looked surprised and answer “what are you talking about? The dress was in the budgeted list. Check to confirm.” It was not easy at the beginning but I am now doing a good job managing my incomes and expenses properly through constant budgeting.
In summary, financial planning and budgeting are one of the most efficient ways to manage your money properly. Your finances will be organised and work accordingly when you incorporate the act of putting monetary operations into planning and budgeting. You should understand that budgeting and abiding by it is not easy. Especially for people like me who were not doing it at all and decided to start. But your willingness and courage to say “no” to some things will help in developing the practise. Embrace budgeting and later, you will be happy you did.