Budgeting Tips For The Financially Savvy Investor

Launching a brand new investing business can be daunting, especially when you need to tackle foreign concepts such as setting up a business budget template. Unless you have a background in accounting or financial planning, creating a new business budget template can be quite bewildering. Nonetheless, setting up a sound financial plan and tracking method is a critical aspect of maintaining a healthy business. Read on to discover budgeting tips, starting with tips for beginners, the best budgeting tips from the pros, and traits of the financially savvy.

Why A Budget Is Important

A streamlined budget is one of the building blocks of any successful business, especially when it comes to real estate investing. If you do not keep an accurate record of where your funds are at all times, you are asking for failure. A budget can help you track cash flow and expenses, as well as set up buckets for each section of your business. It can also allow you to build up a safety net for any slow periods or emergency expenses. Once it is up and running, your budget will essentially act as a scorecard for how your business and investments are performing.

Simple Budgeting Tips For Beginners

If you are at the beginning stages of setting up a business, setting up a budget can be tricky. Most likely, you will not have very much historical financial data, forcing you to do a lot of guesswork when trying to create lists of income and expenses. Here are some tips for setting up a small business budget template to help you get started:

  • Time needs budgeting: Budgeting isn’t relegated to capital alone; it must be extrapolated to account for the time spent on a real estate project, too. “Time is money, especially in the real estate industry,” says Gina Castrorao, a real estate analyst at Fit Small Business. Castrorao suggests investors “write down a plan that includes the money [they] will be spending as well as the timeframe in which [they] want to complete the plan prior to purchasing the property.”

  • Set up a spreadsheet: To get started, you will want to set up a spreadsheet using tools such as Microsoft Excel or Google Sheets. You may even want to explore some of the free business budget templates made available through these applications.

  • Don’t try to budget down to the last penny: The main objective of budgeting is to help forecast income and expenses, and learn how to properly allocate funds towards different projects or expenditures. Because of this, it is not necessary to try to track down to the last penny.

  • Spend time categorizing: Most budgets contain two broad categories, income and expenses, that each contain separate line items for income or expense sub-categories. Take some time to group each recurring income or expense into broader line items to include in your budget, such as “rental income” or “professional services.”

  • Overestimate expenses: Applicable to personal budgeting tips as well, it is always a good idea to overestimate expenses, as well as to underestimate revenue. This practice will help create some slack in your budget in case of unexpected events.

  • Revisit your budget consistently: A business budget will constantly evolve as your company shifts and grows. Make a practice of revisiting your budget at least once a month to keep a clear view of your finances.

  • Keep your business and personal finances separate: As you are first starting as an entrepreneur, it is very easy to get your personal and business finances intermingled. Most likely, you will be investing a significant amount of personal funds into your business, thus making it difficult to divest yourself from your business finances. However, it is critical to make this effort early on and develop good habits. This will help remove your personal liability if anything happens with the business and save you from headaches come tax season. A good way to get started is to set up a separate business account and credit card.

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budgeting tips

Best Budgeting Techniques

Now that we have covered some simple budgeting tips to help you get started, much of which are perfectly applicable to personal budgeting tips as well, let us now discuss a few budgeting techniques that you can incorporate into your small business budget template, once you have mastered that basics. The following are some real estate budgeting tips, according to the pros:

  • Check industry standards: A great way to learn how to best budget for your business is to spend time researching financial standards in your niche. You can talk to other business owners in the area, work with an accounting professional who caters to clients in the real estate industry, or even research best practices online.

  • Set financial goals: Most beginners will often fill their business plan budget template with line items that represent literal inflows and outflows of cash. When providing budgeting money tips, a financial professional will advise you to set financial goals for your business, whether it be saving up for an acquisition or building up an emergency fund. When setting financial goals, you can list them as an expense line item on your business budget template, and in a way, pay yourself each month until you reach said financial goals. This way, you will have an easier time holding yourself accountable.

  • Seek professional tax advice: As a business owner, there are a variety of tax rules that vary based on what type of business entity you have established. Tax laws can be very complex, and entrepreneurs would be wise to rely on a tax advisor or accountant. They can help you file for taxes correctly and help you budget for taxes throughout the year.

  • Make use of financial technology: Making use of financial technology, such as business budget template apps and real estate budging software, can help automate your financial process. This can not only save you time and headaches but can increase accuracy by preventing human error.

  • Involve your team: As a business owner, you will be tempted to handle your company’s finances all on your own. However, a business budget template involves everyone in your team, and each member should be aware of principals and can provide insightful ideas to improve your systems.

10 Traits Of A Financially Savvy Investor

There is no singular financially savvy definition, as it can carry a different meaning for different people. Still, in general, a financially savvy person is someone who has an affinity for planning their financial future. This affinity can be cultivated through desire and commitment, but also through planning and education. Do you have the following traits of a financially savvy investor?

  1. They are able to delay gratification.

  2. They take time to read and continually research.

  3. They remain patient.

  4. They know when to seek advice from a professional.

  5. They stay emotionally divested from their finances.

  6. They spend time improving their skills.

  7. They look for additional income streams.

  8. They are smart about using credit and financing.

  9. They plan for the potential of risk.

  10. They make a long-term plan and stick with it.

How To Become Financially Savvy

Some individuals may be innately financially savvy, but it is a skill and mindset that must be cultivated over time for most investors. Like any other type of discipline, financial savviness is achieved through research, education, planning, and mindfulness. For example, the list of traits above starts with the description of someone who can delay gratification. It can be extremely tempting to reward yourself over every small win, but a successful investor knows how to not give in to every impulse. But, again, this is a skill that takes practice and mindfulness, and not everyone can be expected to be perfect from the start.

In addition to mindfulness and practice, you will find that the financially savvy will get all their tips on budgeting your money through continual education, research, and talking to professionals. Education and research can come from reading periodicals, books on finance, listening to podcasts, or even taking courses. In addition, a good investor inherently knows that working with a professional as needed is one of the best ways to get hands-on, personalized education.

Simple Business Budget Template [Downloadable]

Now that you have been equipped with simple budgeting tips, followed by some more advanced budgeting techniques, perhaps you are now feeling ready to start building your first budgeting mechanism for your business. Download our simple business budget template, here, to help you get started!

Small business budget template


Building your budget should be at the top of your to-do list when starting a real estate business. Remember to keep your business and personal finances separate, set financial goals, follow industry standards, and seek professional advice when necessary. Did you find this business budget template to be useful? What are some unique line items that you like to include in your budgeting spreadsheets? Feel free to share in the comments below:

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