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Here's how to structure your company's financial budget effectively

by , 16 September 2014
A budget needs to be something can understand with just a simple glance. After all, if you have to spend an hour figuring out what you did in your budget, it's just a waste of time.

While your budget's structure may be a personal thing and you do what works for you, there's a basic structure you should always apply.

This will help your budget work consistently month after month.

'What's this basic structure?' you ask.

Read on to find out...


This is the basic structure you should always use for your budget

Because you have fixed and variable income and expenses in your budget you need to account for these in the way you structure it. 
This means your budget should have four sections: first your fixed income, then one for variable income. Total these together to find out how much money you have that month (total income).
There are two more sections for your fixed and variable expenses. Then put your important fixed expenses first and your less important expenses after them. Total these and deduct them from your total income. This ensures you deal with your important and constant expenses first. 
Then add up and deduct all of your variable expenses from the remaining amounts. 
This will give you the amount you have left for the month. From this money, you can then cover onceoff expenses.
But be careful of this one common mistake people make when they use this structure.
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Be careful of this common mistake with this structure

It's a common mistake to see variable expenses as less important because of the fact that you place your fixed expenses first.
This isn't that case though. An example of an important variable expense is your phone bill. It will vary month to month but that doesn't mean it's not important.
Use this structure to help you accurately account for all of your expenses but don't let it confuse the importance of your different expenses.

PS. Here is an amazingly simple way to manage your financials, with the Master Budget Series

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