how to tackle your budget process when you’re “not a math person”

In response to the letter from the manager freaking out about having to do a budget when she hates math, MillenniMedia posted some of the best, most straightforward, easy-to-follow advice on this topic I’ve seen. This is exactly how to approach your budgeting. Read on:

If the term “budget” is freaking you out, try “business plan.” Back away from the numbers for a minute and think about your goals for the next year. Would you like to add staff? Give someone a promotion? Launch a new product? Improve your marketing or retention? Reach out to your customers? Make a list of the goals you have, tasks you need to accomplish, and any challenges that may get in your way. Lay out a time line for accomplishing these goals over the course of a year. Use words – no numbers!

Now, once you have a plan, you’re ready to look at the numbers. Figure out if you’ll need to spend money to accomplish some of your goals. You already have a time line all laid out, so it’ll be easy to drop in the numbers.

For example…If you want to promote someone, what will their raise cost you? Say you want to give them $12k, but all you have is $10k in your budget. That means that either you can lower the raise a bit, or start it two months into the year so that only $10k will be charged to this year’s budget.

Maybe after dropping in all the numbers you find that you just don’t have enough money. Small adjustments in timing or resources can make a big difference! Can you wait six months to hire someone? Can you send one less person to that big conference? Can you ask your printer for a discount on marketing materials…or find another one that can do it better AND cheaper?

For smaller things like stationery expenses, no one expects you to know how many pens and notepads your department will need in a year. Look at the past couple years and stick with a similar figure. Same for phone, utilities, etc.

I also recommend a glass of wine to take the edge off. ;-) Even we numbers people get overwhelmed with the often painful budgeting process. You’ll do great!

{ 6 comments… read them below }

  1. Anonymous*

    This truly is great advice! I feel so much better than I did yesterday. As I mentioned, I did get an extension, but having so many people respond with helpful pointers is the main reason I feel like I can tackle the budget process.


  2. scott m*

    This is why I will NEVER take a job in management. I deal with specific technical issues, not budgets.

  3. Anonymous*

    I keep my own budget spreadsheet through out the year. All expenses that go through me I log in, often with notations. I have found this to be so helpful. When I submit my budget I have a clear picture of my historic budgets with details that make sense. It’s also been extremely helpful when we go over expenses. It’s one thing to say “I didn’t think we spent that much” or “That number should be higher” – it’s another thing to provide a detailed back-up. It’s so quick, and so helpful.

    1. Jenna*

      Yes! I’m truly not a numbers person (I actually have Dyscalculia, a mathematical learning disability), and when I was asked to prepare budgets the first time I was so overwhelmed. Dyscalculia is a bit like dyslexia, so even though I wasn’t performing the actual mathematical function, just looking at the spreadsheet full of numbers made me dizzy. The following year, I did just what you mention– for every invoice that came in, I noted the total and what it was for and any special notes (i.e. ordered a bit extra this time for x project), formatted in a way that was clear and concise for me and me only so that I wouldn’t get overwhelmed looking at it. It only took a minute or two each time and made preparing an accurate budget pretty much foolproof. Just go back and plug your numbers into the (usually horribly formatted :)) accounting dept sheet and you’re set!

  4. Jamie*

    I do this as well – and I can’t overstate how useful this is and totally painless – incur and expense or make a purchase and add to the spreadsheet. I have a field which tracks it against my master budget for the year so I can see my over/under totals per month and ytd.

    I also highlight all expenditures which were authorized by the owners, but weren’t in my master budget…so I don’t get dinged for having my budget hijacked by the people paying the bills :).

    I just know in January when we go over the previous years close I’m never going to remember the software purchases I was requested to make the previous spring. Good record keeping really does alleviate stress.

  5. Angela*

    I have about 300+ accounts in my general ledger, spread out over four branches. Initally, it is overwhelming. I work on budgeting over a course of a month. I take about fifteen accounts a day, and examine the history over a 2-3 year period. If the numbers remain consistent over that period (plus or minus 3% of total), then I can reasonably estimate that account. I highlight any that fall outside that norm.

    I usually end up with about 30-45 accounts that require additional analysis. I take these accounts to the Executive Director for further discussion.

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