The Easier Way to Create a PTO Budget

The thought of figuring out how to make a budget for a PTO can be super intimidating.

It’s such a big responsibility, after all!

Fear not, today’s post is going to walk you through the entire process of putting a PTO budget together!

With the tips included in this post, you’ll have all you need to map out a budget that’ll work for your PTO in no time!

And I’ll show you an easier way to set up a PTO budget!

In fact, an alternative title for this post could be What You Really Need to Know About Setting Up a PTO Budget!

And here’s why…

The main reason why creating a PTO budget can be overwhelming or intimidating is because you’ve not done it before and you’re probably afraid of missing something big.

Let me ease your mind by saying that creating a budget isn’t a huge thing!

Yes, it has to be done, but in reality, it is merely a jumping off point and can be updated or changed at any point in the future.

So let that ease the stress and overwhelm a bit.

Nothing’s being etched in stone. It’s in a spreadsheet that can be easily updated.

What a Budget Isn’t

Let me start off with a super important misconception about PTO budgets.

Your PTO is not a static document that can never change.

Now hear me loud and clear on this point!

That why I’ve bolded it to get your attention.

On the contrary, it should be a living, breathing document that changes to suit the needs of the PTO.

Similarly, the PTO Budget isn’t a pipe dream.

In fact, it’s just the opposite.

As much as possible, you need to base your budget on what the actual numbers will be.

The PTO officers should be taking a look at the budget a few times throughout the year to see where things stand, and making adjustments as needed.

For example, this year we rocked out fundraising at one school so we were able to bump up budgeted amount for staff appreciation and for the end of the year celebrations the school has planned.

But last year, our fundraising at another school absolutely tanked, so we had to make cuts across the board.

As with your personal finances, the PTO budget needs to be revisited and re-evaluated after the budget is first approved.

Ok, so what IS a budget then?

A PTO Budget is no special unicorn.

Just like your household budget, which ebbs and flows with the reality of bonuses from work or unexpected car repair bills, the PTO budget is an estimate of the monetary ins and outs for your group.

Without a budget, you could very easily find that come the end of the school year, your plans have to abruptly change because there’s simply no money in the bank account to fund the event.

That would be a huge bummer and feel like a failure to everyone involved, so don’t make that mistake!

So sticking to the budget is necessary.

Another benefit to having a PTO budget is that it gets all leaders and volunteers on the same page.

Everyone knows what expected.

When Becky goes to get dance decorations and food for the Daddy Daughter Dance, she’ll know that there’s only $500 allocated for the dance, so she can’t spend more than that.

Similarly, Steph knows as Fundraising Chair that her goal is to earn $4,500 from the Concessions Stand this year, so she needs to meet or beat that number.

It’s all made clear by the budget!

A PTO Budget should reflect the priorities of your PTO

Your PTO budget is an absolute mirror reflection of your PTO goals and priorities.

For example, if your PTO plans to add an addition to the school playground, then you’ll probably want to decrease spending for programs and events while increasing savings until that goal is met.

How much you attribute for one category or another depends on where your focus should be as a group.

And that may change from year to year…

A few parents may feel really passionate about starting a school garden, for example.

To get the garden started will require more money than to maintain it, so your budget will reflect that.

But once the garden is up and running, it won’t take as much money to sustain it, so your PTO budget will reflect that change.

Who Should Make the Budget?

Ideally, the President and Treasurer should sit down together and map out the budget.

If the Principal wishes to be involved, invite her into the process as well.

Before the budget meeting, talk with the outgoing President and Treasurer to get an idea of any budget changes that should be made.

They’ll have a good idea of where things were tight or loose money-wise.

And they’ll be able to give you information ahead of time so that you can make the adjustments at the onset and not have to make changes down the road.

Creating a Proposed Budget

The most important thing to know about making a budget is that your income and expenses should net out to zero, or leave a good amount of money to roll over to the next year.

So let’s start there!

Estimate Income

There’s two ways to create a budget- starting either with the expenses or the income.

For simplicity’s sake, let’s start with taking a look at how to estimate your income when putting together an annual PTO budget.

Open up the Categories sheet inside the Treasurer’s Finance Manager and begin filling in information.

Add the names of the fundraisers and other income sources you anticipate having in the upcoming year.

Make sure to include every income source you have, including school grants, community grants, passive income fundraisers and major fundraisers as well.

Consider whether there were any special circumstances with the income source.

Was it is one time grant?

Don’t include it.

Was this the fourth time offering the same fundraiser and the amount raised each year has decreased?

Adjust your expected income amount and enter accordingly in the Budget Tracking sheet.

Using the income earned form the past few years, fill in an amount for each income source listed.

When in doubt, estimate low.

With that all filled in, you now have a ballpark figure for income goal for your PTO.

Now comes the fun part- figuring out how you’ll spend it!

Enter Expenses

Similar to how you estimates income, the a look at the last few years of information on what things cost.

A lot of times, you’ll be able to get a really good idea of what things will cost just looking at this information.

If you’re starting up a new program, and don’t have an idea about the true cost, have the officer or committee chair do some research and report back.

Costs to put on an event should never be determined in a vacuum because that’s just not reality.

Make some calls and get the going rate for a dance DJ …

Want to give the kids another assembly?

Call around and get prices and options and factor the real costs into the budget equation.

You get the idea, right?

In the Category worksheet, list everything you’ll spend money on and don’t forget to included fundraiser expenses.

Yes, they will be offset by the income, but it’s necessary to track to get a true financial picture.

Do Some Math

Once the Income and Expenses have been filled in, take a look at your numbers.

Are you spending what you want to spend in different areas?

For example, if your goal for the year is to get more parent involvement, is $250 for family programming really enough?

Also, do you income and expenses at least net out to zero?

Ideally, you’ll want to leave some money as start up cash for the next school year too.

If you run the account down to zero, it’ll be putting next year’s officer’s into an uncomfortable spot since they won’t be able to do anything until a fundraiser is held.

And that’s not a fun way to begin the school year!

Going into the negative for your PTO bank account also isn’t a possibility, so leave some breathing room!

Put it to a Vote

Now that you have a proposed budget, you’ll want to present it for a vote at your next PTO meeting, after you’ve circulated it to Officers and incorporated their feedback.

It’s easy to overlook a new program or include an expense, so extra eyes can be helpful in spotting those oversights.

Once it’s approved, everyone will know the expectations and spending limits for their position and committee!

Pro Budget Tip:

Add into your Bylaws and standing rules where appropriate that spending overages 10% or less are automatically approved.

This’ll save the headache of having to vote to make budget adjustments throughout the year.

This type of overage is to common given the rising prices of goods and services.

Just make sure your budgeted income amount exceeds your budgeted expenses by more than 10% for this trick to work!

A Special Note for PTOs Just Starting Up

If you’re just starting a PTO and you think you have absolutely no information to work with, fear not. You’re not actually starting with nothing.

Here’s what to do:

Ask your Principal for fundraisers that the school has done before. Learn the type of fundraiser and earnings.

That way you’ll have a ballpark idea of what’s possible when first starting out.

If this information is not available, then you’re going to have to guess estimate.

And with that in mind, you should be conservative with your estimates of income and generous with your estimates of expenses.

In all of my experience, I’ve found that it’s a lot easier to earn more than you think is possible form a fundraiser than it is to come under budget for an event!

Groups that are brand stinking new should consider having a fundraiser early in the school year and then put the budget for the rest of the year together after the net income after fundraiser expenses comes in.

This will eliminate pure guessing and will mean that the budget is based on reality.

Plus it avoids the double work of having to make adjustments in every category based on the fundraising results.

Until the fundraising proceeds come in, your PTO will have to be creative with putting on low cost events!

Watch this!

For a video walk through of setting up a budget, watch this!

https://www.youtube.com/2hPEApCMeDc

Posted in Finances and Money Management, Planning, Communication + Organization, PTO Officers and Leaders and tagged , .

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