#npsquadgoals Challenge #6: Build-a-Budget

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Nonprofit Squad Goals is a regular series of challenges to help you tackle your professional development goals in small, bite-sized pieces throughout the year. We’ll offer advice and give you a platform to network with other young nonprofit professionals who have committed to making this the best year yet for their careers. You can join the challenge and share your journey by using the hashtag #npsquadgoals.

For many of us, balancing our finances falls on the Fun Scale somewhere between going to the dentist and eating your vegetables. Money is a major source of stress, especially for us particularly cash-strapped young nonprofit professionals, but creating a solid budget can make the struggle less real. At YNPN Boston’s latest professional development event, the pros from CFA Society Boston shared some great strategies we’re turning into our next #npsquadgoals challenge, “Build a Budget!”

By the end of April (fitting, since Tax Day is April 18), challenge yourself to:

  1. Identify your current expenses.

  2. Establish one short, one intermediate, and one long-term financial goal.

  3. Write out a personal budget.

  4. Share your victories with us by using the #npsquadgoals hashtag!

Step 1: Identify your current expenses

Creating a realistic budget you can stick to begins with understanding what your non-discretionary (the basic survival needs) spending and discretionary (the more fun stuff like movies or a good book, takeout, or saving a little extra for that dream vacation!) spending currently looks like.  

To make things simple, pull all of your expenses from your credit card/bank statements from the last six months into a spreadsheet. The CFA Society experts recommend using at least six months of data so numbers aren’t skewed by one unusual month of spending. If you’re already using an online financial manager like Mint, Budget Pulse, Budget Simple, or LearnVest, you can do this on their website without needing to download your transactions.

Once everything’s in one place, categorize all of your transactions, then sort or filter your data so you can see each category over the six-month period. Try to categorize everything by the necessary (again, that’s your nondiscretionary spending) and the unnecessary (discretionary expenses). Taking an average of the totals will help give you the start of your current financial picture.

Step 2: Set Financial Goals

Next, you need to figure out what your budget should be, not just what it currently is. To do this, it helps to have a range of specific financial goals. Short-term goals might include paying off your credit card debt or building your emergency savings, and could be accomplished within the next three years. Intermediate goals could be accomplished in the next 3-7 years (buying a house or car), and long-term goals could be completed in 7 or more years (paying for college for your kids, retirement).

Make a list that includes at least one type of each goal: do you want to shore up your emergency savings fund (a short-term goal), and then buy a condo (an intermediate goal), before paying off all student loans? Make sure you are saving now so you are ready to hit each of these milestones.

Step 3: Write your budget!

Weekly, bi-weekly, monthly, printed, electronic - your budget can take whatever shape works best for you based on your income and bills.

Regardless of how you plan to document and lay it out, begin your budget by including your non-discretionary expenses (remember those from step one?) These are the bills you need to pay for your home or apartment, to eat, use your cell phone, travel to work, etc. The general budget formula is below:

INCOME - NON-DISCRETIONARY - NEW GOALS = DISCRETIONARY

After you’ve accounted for survival expenses and financial goals (see part two of this challenge for more on these!), whatever is left are discretionary funds for the fun, non-essential stuff. Making sure your budget allows you to still have some funds for the fun stuff means you’re more likely to stick to it. After all, you have to be able to live a little!

It’s important to remember that a budget is not a static document. You will need to update and edit your budget every 3-6 months (or more often, if you’re coming up short or way off track each personal budget cycle) to make sure you’re staying accountable to the limits you set.

Don’t beat yourself up if you need to add more to your budget - be glad that you are taking control of your financial future!

Take the #npsquadgoals challenge!

Share your best budgeting tips or tricks with YNPN Boston! Use the #npsquadgoals hashtag and:

  • Leave a comment below - what’s one of the biggest budgeting challenges you face as a nonprofit professional, or as a Boston resident?

  • Share a photo or give a shoutout related to one of your budgeting goals.

  • Tag a real-life member of your squad on social media who can help hold you accountable to your budget, if you need a little extra support (or just an extra cheerleader)

We’ve loved seeing you tackle the #npsquadgoals challenges so far and can’t wait to cheer you on for this one!

 


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