BUDGET Is Not A Curse Word

Ever gotten that feeling of anger and despair when you thought of working out a budget? Then chances are you've never cracked a dictionary and learned all about the correct definition, and worked out how you can use that to your company's financial advantage.

Here's the good news. Operating your company on a budget does not mean cutting back on the quality of the things you buy or not purchasing something your business needs to operate. What it does mean, is that you have to work out how to make enough income to afford the items your business has to have and to keep your expenditures within the limits of your income.

There's more good news! The most valuable asset you have is you and your staff, and your income producing potential. If you want a bigger spending budget, then work out how you and your staff can be more productive to generate more income.

A second definition you need know is this: a BUDGET is the amount of income required for the organization to function, and to reach its goals.

Let's consider the first part of the definition; what it takes for you and your business to run. Look at your Profit & Loss Statement to find out how much you spent and add the amount you are carrying on credit cards plus interest. Divide the total by 52 weeks, and multiply it by 1.036. The result is what your weekly budget is. That is the amount of money your company has to generate just to function plus barely keep up with rising prices. That doesn't include paying accumulating interest on credit card debt.

More than likely, you have financial goals you also want your company to reach; That's the second part of the definition. Reaching those goals must get added to your budget as well.

Here is an example: a business owner wants to buy a new piece of equipment 6 months from now that costs $4,000. They divide the cost of the equipment by the 26 weeks they have before the target purchase date and learn they have to set aside $153.85 every week to have the cash for the equipment. This gets added to the budget, meaning the additional amount of income they have to put into the bank every week.

Most importantly, if you, the business owner, want to reach the goal of financial freedom - working because you WANT TO instead of because you HAVE TO -- then the most important part of the budget needs to be the wealth building money you set aside in an investment plan and never touch.

Figure out how much money you would need to have in savings to live without working. Divide that dollar amount by the number of weeks until the time you would like to be financially independent. Figure out how to make that much more money each week, and you are truly on the right budget track to gaining financial freedom.

How badly do you want to be a millionaire in 20 years? Figure out a way to increase the company's income enough to stash away $961.54 a week in savings for the next 1,040 weeks and you have made it to being a millionaire! The additional interest growth on top of that will be a a nice add on perk that more than keeps up with the rise in the cost of living every year.

In this day and age of computers this task of budgeting is made so much easier by streamlined and automated Money Management Software, such as shown in this video.. This software can work as a companion to your accounting software for very efficient use with minimum manual effort.

Sandra Simmons, President of Money Management Solutions has years of experience helping company owners and individuals manage their income to achieve financial independence. To learn more, watch the FREE 5-minute demo video on the website www.MoneyMgmtSolutions.com