Creating a business is one thing, but keeping it is another. Most may view budgeting as a tedious task but it actually plays a big role in keeping a business (of any size) running. Many freelance business owners do not keep accurate tabs of the money, which can mean huge losses down the road. Yes, budgeting takes time and effort but it is the simplest way to save money.

Be realistic about budget expectations.

When starting a freelance business it is critical to understand both your weekly and monthly budget. As workflow increases it is easy to lose sight of the bigger picture; budgets keep businesses on track and should be monitored carefully.

How much do you spend (realistically) on office supplies on a weekly, monthly, even yearly basis? How much does rent, electricity and internet cost you each month? Take a snapshot of all your monthly expenses; make sure to include every single cost when creating a budget. Although $10 for lunch daily may not seem like much, that’s $50 a week that could be allotted elsewhere.

As you write out expenses (big and small) a clearer picture will begin to form: You may notice areas that need more monetary attention and others that seem to have unlimited spending ability. This is also a great opportunity to re-order your priorities.

Key things to remember:

• There are a plethora of websites to help you manage a budget (many of them are free).
• Update your budget daily.
• No detail is trivial: list every expense.
• Make sure to include some “wiggle room” in your business budget for unforeseen challenges. Clients make changes, computer systems crash, and new technologies (like email marketing software) emerge. Padding your budget makes it easier to bounce back from setbacks.
• Once your budget it set, don’t touch it!

You’ve reviewed your expenses and worked out a livable budget for your freelance business. Now comes the tricky part: sticking to it! Although it is tempting to overspend here and cut back there, not adhering to a budget will cost you more in the long run.

At this point, a budget becomes more than a money management tool: it becomes a lifestyle change. If you are willing to cut corners with your budget, what other corners are you cutting in your business?

Some revision is expected but your budget should remain stable for the entire year.

Key things to remember:

• A surplus at the end of the year means an office shopping spree!
• Keeping track of all purchases is helpful come tax time.
• Cash-flow issues are the number one reason freelance businesses fail.

Many small businesses fail within their first year because they don’t stick to a budget. Be realistic about how much you can afford to spend and change your habits accordingly.

Identify your business needs (which should include everything from marketing to office supplies) and then reorder your list according to importance. Make sure to set weekly, monthly, and yearly goals for your business and reward yourself accordingly for meeting your goals.

This guest post was written by Leah B, who is a contributor to the Eat Breathe Blog.

Photo Credit: Senior Living

Featured in the Totally Money Blog Carnival Celebrity Roast Edition hosted by Financial Success for Young Adults.

Planning for a budget is one thing. The hard part is to stay on budget, and make sure you stay within your spending zone.

The spending zone, is a term I use to describe what you are willing to pay for either an object, a grocery shopping experience, or even how much money you are going to spend in a week. For example, “I am only going to spend $50 on a BBQ grill, and not a penny more.”

Sticking to a budget is habitual, the more routine you make it, the better results you are going to see. Here is a list of five ways to make following a budget easier.

1. Never Pay Retail Price.

Although this may seem, almost impossible, it is a very suitable option. Your average retail markup is 30%, so what that really means, is that you are paying 30% more than you have to.

This retail mark up is based on a simple supply and demand model. Once a product has more supply than demand, and fixed costs of manufacturer are met, that product will be sold for manufacturer price, or less.

For example, if a manufacturer sells 90% (90 units) of product A to a department store for 10$ an item they make 900 dollars. If you estimate a 5$ fixed cost, mixed with a 2$ overhead they have $630 in expenses. Therefore a profit of $270.

However, for those last 10 units, simple economics will tell you to sell them as long as you are getting back your fixed costs. In that case the remaining units would be sold at $5 a unit, and a profit is still being made overall. This is when you see sales at stores, or find yourself able to buy the same product at a TJ-Max for half the price. If you have patience, you will never have to pay retail price.

2. Purchase Large Quantities.

If you want to stay on budget and within your spending zone, shopping for larger quantities is a great way to do this. Many people do not wish to shop for large quantities due to inconvenience, or lack of storage. On top of that, some things are just not suitable to buy in large quantities.

However, things like toilet paper, paper towels, toothpaste, soda, freezer foods, are the simplest ways to save money. The savings are endless.

One thing that will be more convenient when shopping for large quantities, is the amount of trips you will to take to grocery stores. Shopping for larger quantities may save you 4-5 trips to the local grocery store.

If you shop in advance, planning two weeks ahead, it is easier to stay on budget and within your spending zone, and save yourself trips to the grocery store every other night after work.

For instance, if you buy a coke every morning for $1.20 you are spending $16.80 after two weeks. If you shop at a Sam’s Club, or a Costco you can get a 30pack of coke cans for around $12. You will end up paying less, for double the product, as well as save trips to the convenience store every day.

3. Buy Last Years Model.

This isn’t always the most appealing option for people, but if you can’t get this years model without all the markup, it is the next best solution. One thing to remember, companies produce products for one purpose, and that is to make money.

With that being said, they have to come out with a new product every year to keep sales high. Usually the “new” product companies come out with, is hardly differently from the previous years model. Every new model is substantially more money from last years model.

EA Sports, a company that produces video games, is even being sued for creating a monopoly in the video game world. They sold virtually the same game year after year, with minor changes, for a extremely high price (around $60 a game).

The video game from the previous year would drop down from anywhere to 8-12 dollars a unit. Think of it this way, when you drive that brand new car off the lot, you lose up to 40% of your value instantly. Whats wrong with buying the used car with 12k miles on it, and paying 40% less?

When buying the newest model, what you are really paying for is the companies new advertising scheme to attract even more customers.

Of course you might be missing out on the newest feature, but is that feature really worth 40% more? one thing to consider as well, your brand new item is going to be worth as much as the old one in about 4 months.

4. DO NOT Eat Out.

When I say do not eat out, I mean, do not eat out often. In fact, it is good to reward yourself for sticking to your budget once a week by enjoying a night of dining out.

If you are staying within all of your spending zones, you won’t have anything to worry about picking up the check once a week, guilt free. This will actually help you to stick to your budget even more so knowing that you have saved “x” amount of dollars throughout the week.

The problem with eating out is when it becomes an everyday occurrence. I am including eating out for lunch every day at work. If you pack a lunch, you can save anywhere between 50-100 dollars every week. Not to mention all the calories you will be saving packing fresh foods.

Then, dining out once a week with the family will be more rewarding, and might even turn into a little family tradition you grow to love.

5. Have a Budget Buddy.

A budget buddy should be someone close, like a family member, spouse, or even a close friend. A budget buddy should be someone you share your financial information with.

Although this may seem scary, this will help you in so many ways. You will second guess spending extra money on those useless impulse items, feel more in control of your finances, and even grow a stronger bond with someone in the process.

It is very important that you trust your budget buddy. This should be someone who is a responsible caring individual.

Don’t be afraid to ask for help, and don’t be afraid to admit you made mistakes. Everyone has made financial mistakes at one point, the first step to fixing them is correcting those mistakes, not just simply ignoring them.

Everyone’s budget is different. Therefore, you must plan accordingly. If you set up spending zones for everything you are buying, and then stay within those limits you will be doing great financially. Debt will slowly disappear, and your stress levels will be relieved as well.

Executing your budget isn’t always the easiest thing to do, but it certainly does pay off.

Want to create a budget? Check out these personal budget worksheets and tips on creating a budget.

This article was written by Alyssa Jacobs. Alyssa is a writer who frequently blogs on areas such as health, finance, and economics. The currently writes for www.acnecentre.com, a website that gives you the latest treatments of acne.

Photo Credit: jenniferworthen

Getting into debt is easy. Getting out of debt is the hard part. Aside from declaring bankruptcy or settling debt, which will both damage your credit, getting out of debt equires strict money management and sacrifices. If you can follow a strict budget, you can get out of debt and learn good money management skills that will help you avoid debt in the future and help you achieve your financial goals.

Debt Payments First

Before you get into the specifics of your budget, pay yourself first.Make your debt payments first. Put aside enough to make your minimum monthly payment on all debts. Excess cash later will also go toward your debt.

Spending Categories

Set up categories for all spending. This will include fixed and variable expenses as well as necessary and unnecessary expenses. Possible categories will include:

• Rent or Mortgage
• Car Insurance
• Groceries
• Gas
• Cable
• Clothes
• Eating Out

For now, include all categories you spend money on, whether they are monthly expenses or not. If you are looking for more specific info on budgets, check out these personal budget worksheet templates.

Limit Spending

Place limits on each spending category. This is where you really start to cut back. Necessary fixed expenses like rent and car insurance will be the same no matter what. If possible, find a way to minimize these as well by talking to your insurance agent.

Variable expenses come as necessary expenses, such as gas, utilities, and food, and unnecessary expenses, such as eating out, clothes, movies, and fast food. Cable, cell phone, and gym memberships are all fixed unnecessary expenses.

A strict budget will nearly wipe out unnecessary spending. The less you spend on gym memberships, clothes, cable, and eating out, the more money that can go toward your debt. All variable expenses can be reduced by using coupons, saving gas, and using other tactics. Use free forms of entertainment to avoid total deprivation.

How Much is Left for Debt?

Take your total take home pay for each month and subtract the total of your spending categories including your minimum monthly debt payments. Whatever is leftover can go toward paying your debt.

The minimum debt payments are going toward debt, too, but it’s the extra money you pay toward debt that will get rid of your debt faster. If you want to contribute more, cut back on your spending categories. If you find yourself with a lot of extra free time, get a second job to bring in more cash.

Stick With Your Budget

Through the debt-repayment period, there may be necessary adjustments to your budget, or you may need to use some money on an emergency expense, but other than that, you must stick to the budget. This is the one key feature of a budget that will get you out of debt completely. A budget is worthless if you don’t use it.

This post was contributed by Jane Sanders from Debt Management. Visit her site for more information on creating a great debt management plan.

Photo Credit: Jeff Keen

Featured in the 303rd Carnival of Personal Finance hosted by Funny about Money.

I used to track my spending through Quicken. But I got lazy and stopped tracking my spending and budget for several months. With Quicken, you have to sign into your bank accounts regularly to get the latest updates and enter information. Many times the information needed to be corrected so if you miss a few months of not using Quicken, it was a pain to catch up. The founder of Mint felt the same way and came up with this great financial budgeting tool.

Mint.com is an award winning, free budgeting tool that links all of your bank accounts and credit cards securely in one place. This gives you a complete picture of your finances, without you having to calculate anything. It’s almost like Quicken but far easier to use. Plus, Mint.com has great budgeting features, a modern designed site, helpful financial planning articles.

First, set up all of your logins for your bank accounts and credit cards. Don’t worry, your info is safe and secure since Mint uses the latest security features. Then set up your budget, setting aside the desired amount per category. Mint will automatically track your spending in each category. You will be able to see how much you are currently spending in each category and how much money is left in your budget.

There is also a transaction tab that looks like a checkbook register. Mint will automatically put your purchases and transactions into a category. You can also edit and correct these categories here.

When everything is set up, Mint puts your budget categories into a graph and a pie chart so you can visually see where your money is going. This really helps if you’re a visual person like me.

Basically, Mint.com makes it easy to budget even if you’re lazy. Simply log into Mint.com and it will pull the latest info from all of your accounts so you can see if you are on target or not.

Why is Mint free? Mint recommends financial products like credit cards or investment accounts according to your individual needs. When you sign up for those products they make money. You are not obligated to look at these products or sign up with them.

If you prefer something low tech to track your budget, check out these 3 personal budget worksheets.