This week my wife and I sat down to
discuss our own personal finances. We
decided to create a budget, not unlike a small business budget that I’ve
created in the past. We slowly applied
each debit and credit to our budget sheet and when concluded, I created a
simple balance sheet with a projected profit and loss statement. If I was to ask Sadie to do this with me
years ago, it wouldn’t have been near as meaningful as we are now very close to
paying our mortgage off and starting a new and exciting chapter in our
lives. I included both my pension and
401K as, with projections for retirement in 15 years. We both feel if we remain strict to our
budget we can have both mission funds and college education set aside for our
two sons. At times, discussing the
budget was tense and nerve-racking.
However, we have had the same goals for over 18 years now and will
continue to do so. We are looking
forward to the future.
After the last two terms of school,
with all of the financial math and lessons I’ve been studying, it’s easy to
picture myself working for a local not-for-profit organization. As a board member or treasurer, I would like
to provide better financials to those who already donate or are potential donors. I believe simple budget statements, profit
and loss, and budget forms are all that are required to enable any potential
donor the ability to recognize the success of our venture. I feel it would be easy to prove to them
through these forms the viability and ability to operate with a positive cash
flow. I think, as a donor myself, it’s
important to see organization within a business. If I’m preparing to donate items or cash, I
would like to see how the money is going to be put to good use. I would like to see a trend of where a
specific not-for-profit business has been historically spending monies. I think being able to back up intent with
financial data is important.
While
reading HBSP’s “Budgeting: Seeing the future”, I made a lot of notes for future
use. I was able to print out the report
for study and future use as well. Some
of the most meaningful ideas were found in “Tips for Negotiating Your Team’s
Budget” and “Tips for Effective Budgeting”.
I feel a business team must all remain focused on common goals to be effective. When a budget is developed, it’s also
important to bring all minds to the table to enable brainstorming and
thought-provoking argument. However,
when it comes time for setting budgets within divisions, it’s helpful to remain
positive and stick to thoughtful 3 – 5-year goals. Being completely transparent with all finances
will lead to success, as long as everyone involved has the ability to manage their
own internal flow.
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