Two budgeting extremes that could land your company in financial disaster

Ashley Churchyard, Fsp Business, 19 Nov. 2014

Tags: budget, budgeting, budgeting mistakes, company budgets, financial budget

Most people find budgeting preparation rather pointless. They think it’s easy to create an effective budget.

These people are normally the ones who get their budgets wrong. More often than not, they end up being too extreme with their budgets on both sides of the scale.

If you’re one such person, beware!

Read on to discover why budgeting extremes could leave your business in financial disrepair…


Don’t be extreme with your budget or it could cost you everything

Treating your budget as if it’s set in stone
If you treat your budget as if you can’t change anything on it ever, you could lose a lot of money.
When your circumstances change, it alters your company’s financial needs. If you refuse to change your budget, you might lose money because you can’t control your necessary spending. Or you’ll force your company to work under unrealistic financial constraints.
You must change your budget to reflect your current financial circumstances.
Here’s the second budgeting extreme that could drain your bank account.
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This other budgeting extreme will cause just as much damage to your finances

Being overly flexible with your budget
If you’re flexible with your budget, to the point that you add and remove expenses willy-nilly, it renders it useless.
This will cost you money because this budgeting extreme means you could end up overspending.
A budget must control what you spend money on. So you need to carefully consider what expenses you remove or add into it.
Don’t be extreme with your budgets. Rather be flexible when necessary but not to the point of frivolity.
To ensure your budgets are always accurate, check out the Master Budget Series. It contains all the budget templates you need. 

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