Week 13 Journal

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.