The Farm Credit Corner

Budgets are a valuable tool to help manage our financials and make decisions for the future. However, building a budget, whether it is for your home, farm or business, can be daunting.

As our thoughts turn to the new year, why not make budgeting a goal for 2020? We recommend these tips to make the budgeting process easier.

Start by looking at the big picture. Consider all of your sources of income and associated expenses. Try sorting your income and expenses into major categories and then fill in the details. Starting with extreme detail at first can be overwhelming.

Compare your numbers year-to-date or to prior years. It's easiest when you aren't starting from scratch. Review any numbers from previous years, even if they aren't entirely accurate for your operation today. At least they are a place to start!

Try to plan for incidentals, but be realistic. It's best to be conservative when compiling your budget. Budget for your income to be slightly lower than expected and expenses to be slightly higher. If you do better than your budget at the end of the year, congratulations!

If there is a deficit in your budget, consider your options. When your budget is showing you a projected loss, determine how you might be able to balance your budget by cutting out extra expenses or considering additional sources of income. Sometimes, you need to determine what the "needs" are versus the "wants."

Don't be afraid to ask for help. Seek outside professionals to provide suggestions and guidance. Your lender or accountant is willing to help. Just ask!

Use your numbers! After you create a budget, use your numbers to track your progress. Compare your numbers to prior quarters and/or years. If you notice that you are off-course, consider needed changes to help you get back on-course.

Remember that budgets aren't set in stone. It is normal to have to tweak your budget from time-to-time. Budgeting is simply a roadmap to help guide your financial progress.

There is no better time to start budgeting than now. Get started today!

About AgChoice

Farm Credit

AgChoice Farm Credit specializes in financing farms and country properties "to help our Martinsburg customers confidently reach their dreams."

Editor's Note: The Herald is partnering with AgChoice Farm Credit to provide information about financing and loans in rural areas such as the Cove.

Reader comments and suggestions regarding this column and its topics are welcome. Send comments to publisher@mcheraldonline.com or call (814) 793-2144.

The Herald is not being compensated for the publication of this column.