As a student leader, you have the responsibility of managing your organization's resources and budget effectively. However, this can be a challenging task, especially if you lack the skills and experience in financial planning and accounting. In this article, we will discuss some of the most common budgeting mistakes that student leaders make and how to avoid them.
One of the biggest mistakes that student leaders make is not having a clear and realistic budget plan for their organization. A budget plan is a document that outlines your income and expenses, as well as your goals and priorities for the year. Without a budget plan, you will have no idea how much money you have, how much you need, and how to allocate it efficiently. A budget plan also helps you track your progress and evaluate your performance. To create a budget plan, you need to estimate your revenue sources, such as membership fees, donations, sponsorships, or grants, and your expenditure categories, such as events, projects, marketing, or administration. You also need to set SMART (specific, measurable, achievable, relevant, and time-bound) objectives for your organization and align them with your budget.
Students often work very hard to secure funding from sponsors to lead the festivals of their colleges. But many of the times, they run out of the budget. It requires to make a collaborative effort in setting the budgets, taking help from peers, seniors and mentors. It will create a realistic budget and will help them to enjoy the festivals with perfect budget and happiness ??
??Budget plan should always be realistic, structured and well thought in collaboration with the expert team mates. Clear goals need to be set before execution of the plan. We fail to execute the plan smoothly and efficiently mostly because the plan is not reviewed well before execution and secondly because the detailed steps are not communicated clearly to each and everyone in the team.
Another common mistake that student leaders make is not reviewing and updating their budget regularly. A budget is not a static document that you can set and forget. It is a dynamic tool that needs to be adjusted according to the changing circumstances and needs of your organization. For example, you may encounter unexpected costs, such as equipment repairs, or receive additional income, such as fundraising proceeds. You may also need to revise your goals and priorities based on the feedback and results of your activities. Therefore, you need to review your budget at least once a month and update it accordingly. This will help you stay on track, avoid overspending or underspending, and identify any problems or opportunities early.
??Budget keep altering according to the priorities, situations and needs of the organisation. Therefore, it should be reviewed on a regular basis. For instance, online events will have absolutely different resources needs as compared to offline events. To avoid unexpected costs and surprises at the last moment, budget plan should be thoroughly reviewed on a timely basis.
Its very important to keep the people involved with you while taking, making decisions, especially the ones related to budgets. This helps maintain transparency and enhances your skills towards becoming an effective communicator. You get your ideas crosschecked before going for major executions.
A third common mistake that student leaders make is not involving their team members in the budgeting process. Budgeting is not a one-person job that you can do alone. It is a collaborative effort that requires the input and participation of your team. By involving your team in the budgeting process, you can benefit from their insights, ideas, and perspectives. You can also ensure that everyone is on the same page, understands their roles and responsibilities, and supports the organization's vision and mission. Moreover, by involving your team in the budgeting process, you can foster a sense of ownership, accountability, and commitment among your team members. They will feel more valued, motivated, and engaged in your organization's activities.
Student leaders in organisations like schools would benefit from the insights of their teachers and school leaders on what things are feasible for their budget. Before setting out to make their budget, it is a good idea to ensure that they are on the same page with the people who would be affected by the actions they hope to implement. So, the team is not limited to those directly on it but those connected to it such as the rest of the school community including visitors. Inviting these people through surveys or discussions to share their views on what the student leaders hope to achieve within their budget fosters a sense of belonging that can help the budget get implemented with less hassle. As it's said, team work makes the dream work.
??Extremely important to involve every member of the team in budgeting process because ?Collaborative efforts help to gain their opinions, ideas and insights. ?Team members feel valued and motivated and work together for vision and mission of the organisation. ?They take responsibility of their actions. ?Involving everyone in the process, keep them on the same page.
A fourth common mistake that student leaders make is not having a contingency fund for their organization. A contingency fund is a reserve of money that you can use in case of emergencies or unforeseen events. For example, you may face a natural disaster, a pandemic, a lawsuit, or a loss of funding that can disrupt your organization's operations and finances. Without a contingency fund, you may have to cut back on your activities, borrow money, or even dissolve your organization. To avoid this, you need to set aside a portion of your income, usually 10% to 15%, for your contingency fund. You also need to establish clear rules and criteria for accessing and using your contingency fund. A contingency fund will help you cope with any challenges and risks that may arise and ensure your organization's sustainability and resilience.
??This can be the biggest mistake one can do while planning budgeting - not allocating any emergency fund. A small portion of income should always be kept aside for unforeseen circumstances and a clear rule should be set for accessing such funds to avoid the debt traps.
A fifth common mistake that student leaders make is not seeking professional advice when they need it. Budgeting is a complex and technical skill that requires knowledge and expertise in accounting, finance, and taxation. As a student leader, you may not have the qualifications or experience to handle all the aspects of budgeting on your own. You may also encounter issues or questions that are beyond your scope or understanding. For example, you may need to file taxes, comply with regulations, or negotiate contracts. In these cases, you should not hesitate to seek professional advice from a qualified accountant, lawyer, or consultant. They can provide you with guidance, support, and solutions that will help you manage your budget effectively and legally. You can also learn from their best practices and tips and improve your budgeting skills.
When in confusion, seeking professional guidance can help ease out the situation. Experiences mould a professional and student leaders are ones who have just initiated their journey of learnings. They shouldn't hesitate to take help from seasoned professionals or their seniors.
A sixth common mistake that student leaders make is not communicating their budget clearly to their stakeholders. Your stakeholders are the people who have an interest or influence in your organization, such as your members, sponsors, donors, partners, or advisors. They need to know how you are using their money and what value you are creating for them. Therefore, you need to communicate your budget clearly and transparently to your stakeholders. You can do this by using simple and concise language, visual aids, and examples. You can also use different channels, such as newsletters, reports, presentations, or social media. By communicating your budget clearly, you can build trust, credibility, and loyalty among your stakeholders. You can also solicit their feedback, suggestions, and support for your organization.
Whether it is budget planning or something else, effective communication is the key towards bringing a success to the outcomes. In my day to day experiences, I have encountered many a student leaders who aren't good communicators and keep assuming things that they think, majority of the masses thinks. This shouldn't be the case.
Often budget is drawn from various sources (e g., fundraising, department heads, donations or even commercial partner sponsorships). I think most make the mistake of depending too heavily on one funding source. Then the budget is often cut or reprioritised over time. So... you just have to keep on top of new funding sources and the existing relationships you have. Delivering value is important.
Don't underestimate small expenses: Frequent coffee runs or unnecessary subscriptions can add up quickly. Monitor and control these seemingly minor costs. Prioritize needs over wants: Distinguish between essential expenses for events or activities and optional ones that might be nice but can wait. Utilize free and low-cost resources: Explore free venues, discounts for student organizations, and volunteer opportunities to stretch your budget further.