You will find a monthly financial plan tailored to your project in our list of 200+ financial plans
All our financial plans do include a monthly financial plan.
How can you create a monthly financial plan without feeling overwhelmed?
In this article, we provide a free tool to do so. If you're looking for something more tailored to your specific project, feel free to browse our list of financial plans, customized for over 200 different project types here.
We'll also address the following questions:
How can one set a realistic monthly budget without feeling overwhelmed?
What percentage of monthly income should be allocated to savings?
How can unexpected expenses be managed within a monthly financial plan?
What is the best way to track monthly expenses?
How much should be allocated to leisure and entertainment each month?
How can fixed monthly expenses be optimized?
What amount should be dedicated to debt repayment each month?
The document available for download is a sample financial forecast. Inside, you'll find the calculations, formulas, and data needed to get a solid monthly financial plan as well as a full financial analysis.
This document, offered free of charge, is tailored specifically to the realities of running a restaurant. If you need a tool for your own project, feel free to browse through our list of financial forecasts.
If you have any questions, don't hesitate to contact us.
Here Are the Steps to Create a Monthly Financial Plan
To skip all these steps, you can simply download a financial forecast tailored to your industry.
- 1. Estimate Initial Costs:
Identify all the initial costs required to start your business. This may include expenses such as raw materials, marketing, website development, and miscellaneous expenses. Make a comprehensive list to ensure no cost is overlooked.
- 2. Break Down Costs into Monthly Expenses:
Divide the total initial costs into manageable monthly expenses over a specific period, such as six months. This helps in spreading out the financial burden and makes it easier to manage.
- 3. Create a Detailed Monthly Financial Plan:
Allocate specific amounts to different categories of expenses each month. For example, designate portions of your budget for raw materials, marketing, website development, and miscellaneous expenses. This ensures that each aspect of your business is adequately funded.
- 4. Forecast Expected Revenue:
Estimate your expected revenue based on your sales projections. Determine how many units you plan to sell and at what price. This will help you set realistic revenue goals for each month.
- 5. Calculate Net Profit:
Subtract your monthly expenses from your expected revenue to determine your net profit. This will give you a clear picture of your financial health and help you make informed decisions.
- 6. Set Up a Monitoring System:
Create a simple spreadsheet to track your income and expenses. Review this spreadsheet weekly to ensure you are staying on track with your financial plan. Regular monitoring helps in identifying any discrepancies early and allows for timely adjustments.
- 7. Regularly Review and Adjust:
Periodically review your financial plan and make necessary adjustments based on your business performance and any unforeseen expenses. This keeps your financial plan dynamic and responsive to changes.
An Easy-to-Customize Example
This example is simplified for clarity. For a more accurate estimate without doing the calculations, use one of our financial forecasts tailored to 200 business types.
To help you better understand, let's use a made-up example of a startup planning to launch an eco-friendly clothing line.
The first step is to estimate the initial costs, which include $10,000 for raw materials, $5,000 for marketing, $3,000 for website development, and $2,000 for miscellaneous expenses, totaling $20,000.
Next, break down these costs into monthly expenses over a six-month period, resulting in approximately $3,333 per month.
To avoid feeling overwhelmed, create a detailed monthly financial plan. For instance, in the first month, allocate $1,667 for raw materials, $833 for marketing, $500 for website development, and $333 for miscellaneous expenses.
Additionally, forecast your expected revenue. If you plan to sell 500 units at $50 each, your monthly revenue goal is $25,000.
Subtract your monthly expenses from your revenue to determine your net profit, which in this case would be $25,000 - $3,333 = $21,667.
To ensure you stay on track, set up a simple spreadsheet to monitor your income and expenses, and review it weekly.
By breaking down the financial plan into manageable monthly segments and regularly reviewing your progress, you can maintain control without feeling overwhelmed.
The result is a clear, actionable financial roadmap that supports your business launch and growth.
What Should Be Included in a Monthly Financial Plan?
Here are the key elements that should be included, all of which you will find in our financial forecasts tailored to 200+ different business projects.
| Element | Description | Purpose | Frequency |
|---|---|---|---|
| Income | All sources of income, including salary, bonuses, and other earnings. | To understand the total inflow of money for the month. | Monthly |
| Fixed Expenses | Regular, recurring expenses such as rent, mortgage, utilities, and insurance. | To account for non-variable costs that must be paid each month. | Monthly |
| Variable Expenses | Expenses that can vary each month, such as groceries, entertainment, and dining out. | To track and manage spending that can fluctuate. | Monthly |
| Savings | Money set aside for future use, including emergency funds, retirement, and other savings goals. | To ensure a portion of income is saved for future needs and goals. | Monthly |
| Debt Payments | Payments towards any debts, including credit cards, loans, and mortgages. | To manage and reduce outstanding debt. | Monthly |
| Investments | Money allocated towards investments such as stocks, bonds, and real estate. | To grow wealth over time through various investment vehicles. | Monthly |
| Financial Goals | Short-term and long-term financial objectives, such as saving for a vacation or buying a house. | To provide direction and motivation for financial planning. | Monthly |
| Emergency Fund | A reserve of money set aside for unexpected expenses or financial emergencies. | To provide financial security and peace of mind. | Monthly |
| Net Worth Calculation | A summary of assets minus liabilities to determine overall financial health. | To track financial progress and make informed decisions. | Monthly |
| Review and Adjustments | Regular review of the financial plan to make necessary adjustments based on changes in income, expenses, or goals. | To ensure the financial plan remains relevant and effective. | Monthly |
Our financial forecasts are comprehensive and will help you secure financing from the bank or investors.
Common Questions You May Have
Reading these articles might also interest you:
- How to predict the break-even point (in days) for a new project?
- How to conduct a profitability analysis for my product or service?
- How to perform a financial analysis for a startup?
How do I determine my monthly income for a financial plan?
Start by listing all your sources of income, including your salary, freelance work, and any passive income streams.
Calculate the average monthly income by summing these amounts and dividing by the number of months considered, typically 12 months.
Ensure to account for any seasonal variations or irregular income to get a more accurate figure.
What percentage of my income should I allocate to savings?
A commonly recommended guideline is to save at least 20% of your monthly income.
This can be adjusted based on your financial goals, such as saving for a down payment or building an emergency fund.
Review your budget regularly to ensure you are meeting your savings targets and adjust as necessary.
How can I track my monthly expenses effectively?
Use a budgeting app or spreadsheet to categorize and record all your expenses, from fixed costs like rent to variable costs like groceries.
Review your spending weekly to ensure you stay within your budget and identify any areas where you can cut back.
Consider setting up alerts or reminders to help you stay on track with your financial plan.
What is the ideal debt-to-income ratio for a healthy financial plan?
A good debt-to-income ratio is generally considered to be below 36%.
This means that your total monthly debt payments should not exceed 36% of your gross monthly income.
Maintaining a lower ratio can improve your financial stability and creditworthiness.
How much should I allocate for discretionary spending?
Discretionary spending typically accounts for about 30% of your monthly income.
This includes non-essential expenses like dining out, entertainment, and hobbies.
Adjust this percentage based on your financial goals and priorities to ensure a balanced budget.
What tools can help me create and stick to a monthly financial plan?
Consider using budgeting apps like Mint, YNAB (You Need A Budget), or PocketGuard to streamline the process.
These tools can help you track income, expenses, and savings goals in real-time.
Additionally, setting up automatic transfers to savings accounts can help you stick to your financial plan effortlessly.
How do I adjust my financial plan for unexpected expenses?
Build an emergency fund that covers at least 3 to 6 months of living expenses to handle unforeseen costs.
Regularly review and adjust your budget to accommodate any changes in your financial situation.
Consider setting aside a small percentage of your monthly income specifically for unexpected expenses to avoid disrupting your financial plan.