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Ways to budget effectively

Learn how to make a budget is to make the flow budget that gives you an overview of the money that will be available in your company prior to stipulating a period of time.

How to budget and what it is for

Learn how to make a budget It is essential for your company because it allows you to do a good planning of resources, control them and dispose of them in a coherent way.

Taking into account the importance of its preparation because it means that your company will remain healthy financially, it is important to prepare it correctly to avoid bad consequences in the short or long term.

How to budget and how it is divided

To make a budget you must know the parts into which it is divided so that you can take them into account when preparing it.

  1. The inflow is the first part that a budget is divided into, and it signifies the expected cash receipts.
  2. The outflow represents the anticipated cash expenses.
  3. Ending cash represents the starting cash amount along with the net cash flow for the budget period.
  4. Net cash flow is the difference between cash inflow and outflow from the business.
  5. The surplus cash balance is the cash available to the company to make investments while the operations made result in a surplus.

How to make a work budget

Taking into account the parts of a budget, to prepare it you can guide yourself through the following step by step:

Step 1: First of all, you must establish the period of time that the budget you are about to prepare will cover.

Step 2: Once you establish the time period, gather cash inflows and outflows that are expected during the established time period.

Step 3: With all the data with you, prepare a sales and income budget with the data you have of the payment and purchase budget.

Step 4: Take into account all the contingencies that affect cash flow and that influence any cash budget.

How to make a freelance budget

In the event that you have started a project as a freelancer regardless of the area in question, it is important that you learn to make a budget to deliver it to your client and you can understand the dimension of your work with its costs, etc.

Step 1: Before you start with your work, contact the client in the way you want, since in this way you can know exactly what your client’s intention is, if he has clear ideas, if you can help him implement his idea or guide him to get there to a good deal.

Step 2: You have already agreed with your client how the project will be carried out, then you must think about the time it will take you to do it with the tools and resources, then evaluate time and money, time of work and the possibility of outsourcing.

Step 3: Create a schedule with the start date of that project, with its materials, project stages with their dates and the end date of the finished project. This time you will agree with your client.

Step 4: Create a work plan describing how you will carry out the project. Explain what the work methodology will be with its stages and the price.

Step 5: Calculate the price taking into account the time of the project, the costs of the project, the hours, the possible outsourcing and its cost and then add a profit margin.

Step 6: Think about the form of payment, cash or credit, with a percentage of advance and the rest at the end and delivery of the completed project.

Step 7: The budget may have an annex of conditions and guarantees that will include the validity of the budget, the conditions to carry out the work and the inclusion of a guarantee in case of dissatisfaction.

How to make a construction budget

Learn how to make a construction budget It is important especially when it comes to building your own house:

If you plan to build your house from scratch, start by calculating the cost of leveling and filling the land, as they are your expenses to condition it.

  1. It includes the cost of the architect’s fees that will help you with the design of the construction of your house.
  2. Includes the cost of materials for electrical service, gas, water, sewer installation, etc.
  3. Research the market to include the cost per square meter of basic construction.
  4. It includes the cost of inspections, permits, and expenses that relate to fees and legal issues.
  5. Include the cost of other materials that may come up as necessary while you budget and builders’ fees.
  6. Always keep in mind fixed expenses such as the cost of materials, fees, and fees. Research the market and according to the entire surface of the work multiply it by the price of the construction.
  7. You should also consider that if it is a remodeling or refraction there will be elements that reduce the budget since you will not need to include the installation of services and their materials, nor will you include the municipal taxes.

How to make a family budget

Making a family budget is as important as a budget that an entrepreneur prepares to maintain the financial health of his company, because in the family the family budget maintains the health of the financial state of the home, so you can do it this way:

  1. You can use an Excel spreadsheet or just jot down in a notebook.
  2. Write down all the money that comes into your home, they are the fixed income such as the wages of all the components of your family, the income that may arise from rents and the variable income that is made up by overtime work, the jobs that can do independently in addition to your regular job.
  3. Identify fixed expenses such as loans, gasoline, school fees and others in addition to variable expenses that include going to a party, going to the movies, a restaurant, gifts and others.
  4. With discipline choose the expenses that can be eliminated based on cutting expenses.
  5. Establish a savings of between 5 and 10% of your monthly income.