Pursuing excellence in your project can be a very exciting and thrilling ride. You can easily get into a zone where your efforts are focused entirely on the outcome of your project. While this might be what you love it becomes very easy to lose your perspective of everything else that is happening in the world. Suddenly your project might start to collapse from simple oversights which could have been avoided from the planning stages. One of those forgotten aspects is usually managing your money.
Now I will tell you up front that you MUST and I repeat MUST know how to manage your finances effectively from the planning stages so that you don’t run out of money or overspend when your project is nearing completion. While money is something we don’t like to think of when we are working on a project, without it there wouldn’t even be a project.
So to help you with managing your money here are some tips to make sure your project is financially secure from the start.
Create A Budget Before You Begin
Budgeting can be one of the most laborious processes in project planning but it is the most vital. Open up your favourite spreadsheet program and start listing all the different items you might require for your project and the costs associated with them. This includes the cost of any equipment or props you purchase, travelling costs, production costs, personnel costs, anything you can think of. Make sure you list everything you will need! One of the worst things is to come to the end of the project and overspend because you forgot some vital items in the planning stages.
If you are working solo on the project don’t neglect to include your own time as a cost in the project. Estimate the amount of hours you will spend on the project and calculate what you would like to earn per hour. Doing this will help you decide if your project is worth the time and effort you plan to put into it. Budgeting will also help you decide if you can afford the project you want or whether you need to scale it back.
Track Your Spending
It almost goes without saying that you need to make sure you keep up to date with what you have spent throughout the life of your project. Make sure you keep all your invoices and receipts. Stay in control of the time and hours you and your personnel work. Write all the spending into another column in your spreadsheet so that you can compare your expenses with your budgeted items and work out how much money you are using.
If you are starting to go over budget it means you will have to be more careful with further purchases or even cut back your project to make sure you stick to your budget. If it looks like you are under budget you might be able to finish the project and have some spare cash to kick off your next production.
Make Use Of Online Resources
There are also many online tools and resources which you can use to keep track of your budget online, some you will have to pay for but some are free. Using one of these systems will not only make life easier, but it will keep sure your budget safe on a secure server… just in case you lose your laptop while driving through a river in the Amazon. Here are just a few of these resources.
FreshBooks – Online accounting, billing, time-tracking, and bookkeeping.
Simplifythis – Appointment scheduling, invoices, payments.
Outright – Free easy to use online bookkeeping, (also integrates with FreshBooks).
Xero – A fully fledged online accounting system.
Don’t Overspend Stick To Your Budget
The worst thing you can do on your project is overspend. If you’re halfway through the project and about to interview someone important don’t go out spending money on new cameras or equipment unless you had included this in your budget. You went to all the hard work of preparing a budget, you started tracking all your spending, so don’t blow it by spending money on items you have not included in your budget.
The simple rule is that if it is not on your budget in the first place then you shouldn’t go out and spend money on it. Sure it might be nice to have but when you planned your project you obviously didn’t see that item as necessary. Careful planning and budgeting is only good if you actually make an effort to stick to your budget. So buy only what you have made allowances for in your budget and you should not have a problem with overspending.
{ 2 comments… read them below or add one }
My friend, I am the least disciplined of mammals when it comes to managing money. There is definitely an emotional component to my spending, some sort of validation that “I made money, this is how I prove it.” Lame, but true. I’m doing better, and I really, really like your writing style. I’ll be back. Keep marching forward and doing what you’re doing.
Thanks for the comments Josh, I really appreciate them.
I am certainly the same when it comes to personal spending. There is definitely some emotional component to it and I must confess that it did take me a while to realise that having a savings plan and money in the bank was a beneficial thing. When it comes to my projects though I have always tried to give them careful consideration beforehand so that I don’t spend too much money and so now I am trying to apply that approach to personal spending as well. At the end of 2010 I would love to be able to say that my personal spending is just as well managed as my project spending. So far 2010 is off to a good start.