Planning Your Budget for 2022

Hello Weekend Club Members!!

Hope you've had a good start to 2022!! I've had a bit of a rough start with my fiance and I coming down with Covid right after New Years. Definitely made my plans of hitting the ground running after our Christmas break a little tough lol but we're doing much better and I'm easing back into work this week. 

How many of you actually create a budget and stick to it? I will admit I start off every year with a budget and stick to it for about 3-6 months before just kind of fading into spending without really thinking about it. My goal this year is to be more on top of our money and spending and to keep track of everything throughout the entire year. 

Having a budget is going to help you to be able to set financial goals that are necessary to keeping your bills paid, know where your money is going, save for future expenses and see any differences in your financial plan and reality. 

If you want to stick to a budget with me, here are a few tips that I've learned throughout the years!

The first thing to do is decide where and how you want to track your budget. Now you could easily do this in whatever platform you use to do your bookkeeping such as Quickbooks. Personally I keep our categories in Quickbooks more broad but I like to have a more detailed breakdown in our budget. 

For example, ad spending, our website hosting, and shopify subscription all fall under marketing so thats what they are marked as in Quickbooks but I like to see how much was spent individually for each of those in our budget if that makes sense. Because of this I like to keep our budget in a separate spreadsheet. It's a little more work but for some reason it's easier for my brain haha. You could also use a budgeting software like You Need a Budget, Every Dollar, Mint, etc. 

There will be two categories in your budget, fixed expenses and variable expenses. Fixed expenses are costs that are necessary on a recurring basis to run your business. Examples of fixed expenses would be taxes, rent, and insurance. These are costs that are set and cannot be changed or eliminated. Variable expenses are expenses that are variable and can be changed or eliminated. Professional development, marketing, and company meals would fall into this category. These expenses can be cut out if you need to reduce costs. 

To get started making your budget, make a list of all of your fixed and variable expenses. It's helpful to take a look at what you spent last year to get a realistic idea of what you usually spend. Include all expenses that you pay monthly as well as those you only pay once a year. Also include your salary, taxes, and the amount you want to save each month. 

This is a great time to go through all of your subscriptions and other expenses and see what is actually necessary and what you can cut out. The lower overhead you have, the more freedom you will have to pay yourself a higher wage as well as just be picky about the clients you take on. If you have a really large overhead then you're going to have to earn more to compensate for those expenses. 

To give you an idea of what to include in your budget, here is the list of the sections and line items we have. Yours will vary depending on what you choose to include in your own business but hopefully this helps you to brainstorm:

PAYROLL
Elle
Arabela

CONTRACTORS
Podcast Editing
Ad Management
Copywriting
Accounting

OFFICE/STUDIO
Rent
Security
Office Decor/Furniture
Office Supplies and Snacks
PG&E
Internet
Studio Cleaning
Repairs and Maintenance

SOFTWARE
Creative Cloud
Dropbox
Google Storage

PODCAST
Buzzsprout
Squadcast
Cocktail Ingredients

LEGAL + PROFESSIONAL
Quickbooks
Hello Sign
Bank Fees
Lawyer Fees
Image Copyright
Pixsy

SHOOTS
Shoot Props
Equipment
Set Pieces

MARKETING
GSuite
Squarespace
Domain
Email Marketing
Scheduling
FB/IG Ads
Google Ads
Tailwind
Teachable
Client Gifts

FOOD/PERKS
Doordash Dashpass
Company Meals
Yearly Party

EDUCATION
Courses
Books

COST OF BUSINESS
Health Insurance
Business/Studio Insurance
City Permits
State Registration
LLC Tax
Taxes
Savings
Amazon Prime
Assorted Costs

I like to add a small line item for assorted costs into our budget to catch any other little costs that might arise throughout the year. I put all of these line items into a google sheet and create columns for each month. I also include the monthly estimate as well as the actual monthly and yearly totals. This way I can see how we're doing each month as well as for the year. 

Here's a screenshot of what those columns look like in my spreadsheet:

Again, you can use any budgeting software you want, I know there are lots of programs that connect to your bank account and make this process a lot easier haha. I just like this way of doing it and find that it makes me stay more organized and accountable so do whatever works best for you and your brain!

About once a week I try to go through our expenses and enter them into our budget as well as categorize in Quickbooks. You can do this more or less often depending on how many expenses you have, I find that this routine allows me to stay on top of it even if I miss a week here and there. 

So tell me, do you stick to a budget? Do you have any tips that I left out? Let's make 2022 the year of organized finances!

Is it the weekend yet?
Elle