BUDGET 2023!

Last week I asked if you had set you goals for 2023.  Now you have had a week to complete the goals, but my next question is if you have set a budget for 2023?  Even if you have not set budget for the whole year, did you set budget for January 2023?

Just as setting goals, creating a budget is a process.  In fact, there are several ways to create the budget, but here is a process that is not overly complicated and easy if you have never done this before.  

Your budget is essentially a list of expected income and expenditure for the period of the budget.  Here is the process:

1. Income:  List your expected income (in the case you are a farmer, income may be periodical, but that does not matter, you just take the total income for the period and dived by months to get the expected monthly income).  
2. Expenses:  Here you will list all the business-related expenses, including your salary.  Yes, it is very important to dived the business and personal.
   1. You start with all the fixed expenses.  Expenses you have every month for the business to run.
   2. Then you list all other expenses you may have for the business.
   3. Finally, if you have done your goals, you will list the additional costs you may have to incur in for you to achieve your goals.  For example, if your goal is to grow your farm, you might have to make an investment, break new ground, purchase additional seeds, fertilizer, etc.  These expenses should be linked to each goal, because you should have linked additional income to the accomplishment of each goal.  
3. Saving:  What is left, after you subtract the expenses from the income, is your gain.  This gain is, at first, listed as saving.  What you do with this saving, depends on your goals.  
   1. You save it, and create funds for the future.
   2. You invest it back into your business (farm), to increase profitability in the future.
   3. You spend it (not recommended).

This is a very basic budget set-up, but once you have it done for January, you will review it and evaluate it by the end of the month, to see how close you were to reality.  Al discrepancies, positive and negative, must be analyzed, for you to do better budget for February and so on.