Managing your operating budget

One of the changes that Michigan State University Extension staff members in county offices are facing this year is in how they manage and pay for their operating expenses, including travel costs, purchase of program-related materials, photocopying, cell phone fees and others. On Monday’s biweekly Director’s webinar, Annette Tijerina and Michelle Rodgers explained the process involved in obtaining a purchasing card that is tied to individual operating accounts. We will be providing online training opportunities for use of the purchasing cards and other procedures associated with managing individual operating accounts.

 One online resource is already available, from our Fall Extension Conference recordings. On Thursday, Oct. 20, Linda Huyck and the Finance, Housing and Energy work team provided a training session called “Budgeting (Not) for Dummies” on budget planning that is as relevant for operating accounts as it is for family financial management. I really liked the way Linda set the stage for the webinar by saying that with regards to budgets “you need to know where you’re headed” with your budget. In other words, if you have a fixed amount of money available for your operating account, it is important to prioritize the costs that are most important to cover and to understand the difference between your operating “needs” and operating “wants.” Linda provided an example of a spending plan for family budget management, and I imagine that some individuals may have already developed their versions of a spending plan for their operating accounts. If you have a model you’re willing to share, please share it on my blog.

 One of the unique challenges of a budget such as your operating budget is that it receives funding INTO the account once per year, not once every two weeks or once monthly like a family budget. So it’s not just a matter of planning a monthly budget, but rather a year-long budget, and then tracking it carefully to make sure the funds for “needs” in June are still available in June and the funds aren’t completely spent in January.

 We will have many other tools available to help learn how to manage these accounts, but I thought it was helpful to point to something already available from our colleagues to get started on the planning process.

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