Budgeting 101

When handling finances for your Club or Society, budget carefully and always consider all possibilities. Here are some important points to consider:

What is a budget?

• A budget tells the story, in money terms, of what your group’s plans are.
• A budget can be annual – a plan for all the costs over a year. It can also be specific to a particular event or project that you are planning.
• When applying for a grant, you must provide a detailed budget outlining the intended use of funds and other sources of income.
• A budget helps you to make financial decisions and keep control during the year / during your project.
• A budget can change throughout the year, but having one reduces the risk of running out of money due to unforeseen circumstances.

Preparing a Budget

There is nothing mysterious about writing a budget. It is like writing a shopping list, together with the cost of each item. You then work out where you will get the money to pay for everything.

Think about what you will need to pay for – it’s helpful to write a list of all the items that you are likely to need to pay for. Think through every activity or event you will run and all the things that will cost money.

Estimate the cost of each item of expenditure as accurately as you can. When you first start out, it can be difficult to work out costs, but don’t just guess. Obtain quotes to compare prices - don’t assume that your predecessors knew the best companies to use, have a look yourself to make sure you are getting a good deal.

Considering Income

Estimate potential income sources, including unconfirmed grants and other income.

There may be some income that is uncertain. For example, if you charge membership fees, the amount you will receive will depend on how many members you have. Try to make the best estimate you can. It probably won’t be 100% accurate, but it will be good enough to help you give a rough idea of how much money you will have available during the year.

If you expect to receive and spend money for an activity (such as hiring a coach and selling trip spots), include all income, even if it will be spent immediately. Also include any cash income, such as member contributions. Remember to note the expected dates of income to avoid overspending.

Using the Budget

Most of the budgeting is risk management. Is the money available? Will ticket sales recoup the costs? Is predicted income guaranteed or assumed? Budgets need to be realistic, don't manipulate figures, and always have a 15% contingency.

Your budget should be used and updated regularly throughout the year to keep track of your finances and progress. The treasurer should present regular finance reports to the group or committee, detailing actual income and expenses to date and comparing those figures with the budget. This will help assess financial progress and determine available funds for different purposes.

Summary

You will find it useful to look at previous budgets and your successors will find your budget useful if it is detailed and done well.

Remember - students must not transfer or accept any form of funding relating to your club or society to a personal bank account (e.g., accepting ticket sales or other income).

The club/society accounts are your responsibility. The Students’ Association won't bail you out if you overspend. Overspending leads to deficits, funding cuts, and repayment plans.