Growing up my Mom always said I was “penny wise and dollar foolish.” Mom thought I was good at finding a bargain and watching my pennies, but when it came to spending dollars I could make better choices. The other day it occurred to me that Mom has it wrong. I’m penny wise, so I can be dollar foolish. I watch my pennies, so I can spend my dollars how I want. So I go for the mani/pedi, because it makes me feel good. But, I’ll only buy paper towels that are on sale and I love using coupons.
My penny wise and dollar “my way” philosophy made its way into my event budgets. With fiscal years are coming to a close; new budgets are being cut and approved; I thought it was a good time to revisit event budgeting.
I am proud to say I’m cheap, but I’m also proud to say that I will spend money if in the long run it will save time and money. Last year, I shared my thoughts on when to DIY when to hire a PRO [defunct link removed]. In the post I shared how your time is valuable and time needs to be a factor when deciding to DIY or hire a PRO.
At some point this June, your boss comes back to you with your newly trimmed budget take a close look at it. See what’s been cut and ask yourself “did the right items get cut?” In my past life as an event planner, I’ve had managers cut items that seemed to unnecessary, but in reality there were other items that could be cut.
For some of you out there, your boss might come to you and ask you to cut your expenses. Here are the most important questions to ask yourself when trimming your budget:
- How will cutting this item affect revenue?
- Is this line item tied to revenue? Will you get a return on your investment?
- How much time will it take for me to complete this task instead of paying someone? Is this task the best use of time? Is task taking time away from my primary job: raise money?
By going through this exercise, you might find that your expenses are valid and cutting an expense will impact your revenue. You’ll also find a few items that would be nice to have, but not necessary to increasing revenue.
Tip: share your findings with your boss. You don’t need to go into every detail, but walk your boss through your expense. Connect the dots between expenses and revenue. Your boss will appreciate having a better understand of your overall budget so he/she can share your vision with the board.
Here’s the last thing to remember when budgeting. Your budget just like your event it will evolve. You might realize something you budgeted for isn’t necessary and instead you’ll use the funds for another purpose. A budget is a work in progress… over the next year different items might get cut and new items might get added, so it’s important to keep track of the overall number. And of course ask always ask yourself “What the purpose of spending money on this?” “Will this expense help me raise more money?”