Daily Dimes 11/18/09

Many people come across stories in the media with regard to large corporations announcing quarterly dividends, stock reports, etc., (or governments trying to budget for the coming year) and believe that these conglomerates are the ones that need to plan and budget — not you.

All you have, you think, are some retirement accounts, checking, and maybe savings. Nothing to plan, right? Too daunting?

Wrong. The stories in today’s Daily Dimes show that small businesses and vertical businesses use the same principles to budget that you and I should.

This press release off of PR Newswire gives small businesses practical tips to utilize when preparing a budget for the coming year. This article gives those in the hotel and hospitality industry guidelines for proper budgeting, as well.

Here are a few of the tips from each of these articles, and my translation in parentheses:

• recognize what a budget is for (have personal finance goals in mind you’d like to achieve by budgeting);
• start now (stop procrastinating);
• zero-base every line item (justify all of your discretionary expenses);
• use lean Six Sigma (determine where you could streamline some expenses and save money);
• understand cash flow (know how much you’re spending … and on what);
• improve cash flow (find ways to either save money or make more);
• plan for contingencies (leave yourself a cushion in case of an emergency); and
• regularly compare actual results to budget (have some specific goals in mind when creating your budget and ensure you’re working toward those when you review your progress).

Sound familiar? The expenses and amounts of money may differ, but the basic principles of budgeting are the same — whether you must justify your practices to shareholders or to yourself and your family. Get in the habit of budgeting your money today, and it can pay off down the road … professionally and personally.

Professionally you ask? Think of it this way — say you’ve been practicing sound budgeting practices and found real cost savings in your personal life. One, congratulations! Two, if you are in a position to impact spending and investing at your job, you could take those principles to make some legitimate suggestions to help save your company money and become more profitable. And what company isn’t looking for that nowadays?