Building a House Budget

Spartan Housing Cooperative Pine Press, 27 August 2021 Left: a beautiful kitty at Howland, submitted by Alayna Offredi. Right: Happy Howlanders; bottom left and center, cat of Ferency

Wanna show off what your house is up to? Submit to the Pine Press at education@spartan.coop !

House Finance for Non-House Treasurers: Building a House Budget

By Leah Rogers, Corporate Treasurer, of Vesta

It’s that time of year again, co-opers: time to submit your fall house budgets! Many of our house finance officers are already well-versed in creating healthy house budgets, so I am writing this article with the intention to provide some guidance to those who may be less experienced or who will soon be voting on a new house budget.

It is important to keep in mind that your house budget is expected to be submitted by the end of the first month of each semester. Newly submitted house charge amounts will be posted to member accounts beginning the 1st of the month following the month during which an approved budget is received. This means that if you want your house budget to start on September 1st , the budget is due by August 30th . All approved house budgets should be emailed to msc@spartan.coop and treasurer@spartan.coop. It has been standard operating procedure to continue using the last approved house budget until a new approved budget is submitted. Approval of a house budget means that a majority of house members have voted “ yes” on a proposed budget. Unless your House Constitution states otherwise, a unanimous vote is not required to pass a house budget. A proposed budget can be voted on at a quorum house meeting, via an online poll (such as Facebook or GroupMe), or as a printed budget with member signatures. When in doubt, overbudget! Overbudgeting means you may be charging yourselves more month-to-month, but in doing so, you may be able to avoid a deficit come the house audit (more on house audits later in this article). You can calculate your projected expenses by looking at past house financial records.

What does a house budget look like?

Your house’s budget will be created based on the number of residents contracted for your house and the expense categories that you budget for. These expense categories include all of your utilities, house meals and pantry, house savings, vacancy reserve, maintenance, and any other budgeted house expenses. Below is an example budget worksheet from my house, Vesta!

This sheet may seem daunting at first glance, but once you break it down, it can help you gain a deeper understanding of your house budget, and where any weaknesses may lie! For the most part, the formulas built into this sheet will create your budget for you, with you inputting several different items. Anything in a gray cell has a built-in formula that is linked to another cell in the spreadsheet. For example, the “food and supplies” budget in the orange box calculates your total monthly house meal and pantry expenses based on your inputs in the green, blue, and yellow boxes to the right.

Spartan Housing Cooperative Pine Press, 27 August 2021 When creating a semester budget, it is important to note which costs may vary from month-to-month and which costs will stay the same. Internet, trash, maintenance ($5/member/month), vacancy reserve contributions (2% of total monthly Carrying Charges), house savings, and phone lines (if your house has them) are all fixed costs. This means that you can expect to pay the amount that you budget for each month (in other words, you should budget for the amount that you know you will have to pay). Other utilities and the amount that your house spends on food, on the other hand, may fluctuate each month or as the seasons change. For example, gas bills are typically lower during warmer months, so you may decrease your budget for gas going into the summer semester. When budgeting for variable expenses, it is important to look at how much your house has spent in the past to get an idea of what to expect. Last year, when my house was consistently going over our electricity budget, I calculated our 6-month average electricity expenditure and my house voted to increase our budget to align with the average. By budgeting for our average cost as well as making conscious efforts to lower electricity usage, Vesta was able to avoid a deficit during the Spring audit! How do you budget for pantry and meals? Your house’s pantry budget will depend on what kind of foods you plan to supply for members. At Vesta, we collectively purchase basic goods, such as milk, butter, eggs, bread, flour, sugar, spices, and some fruits. This keeps our pantry budget fairly low, at about $12 per member per month. If your house decides to provide more than basic pantry items, you may consider charging a bit more for your pantry supplies. For house meals, a good rule of thumb is to budget for about $2.50-$3 per member per meal.

What about the audit?

Being audited is usually something that new members are unfamiliar with, but I promise it’s way less scary than it sounds! Every 4 months, house finances are audited to assess for the previous semester’s surplus or deficit. During the audit, staff members, as well as myself, sit down with your house’s finance officer and look over what your house collected in income and spent during the previous semester. The amount that your house spent is then compared to what your budgeted for and the difference is calculated to determine if you were over or under budget. If your spending was over-budget, then your house will end up with a deficit. Deficits can be passed on to members who were living in the house when the deficit was accrued to be paid back, or members can vote to cover the deficit with house savings, if they have the means to do so. Surpluses, on the other hand can be returned to members as a nice little bonus or kept in the house savings account for a rainy day. The next house audits will be taking place in October and will analyze spending during May-August 2021.

The takeaway:

Building a budget doesn’t need to be daunting, even if you ’ ve never done it before! The budget sheets that we use for our houses break down spending into categories so that you can see where your ultimate house charges are coming from. Your house finance officer should be familiar with this sheet and be able to answer any questions you may have about your specific house’s budget. I hope that you learned something from this article and that you feel prepared to vote on your Fall House Charges! If you ever want to chat finance, co-ops, or anything else, hit me up at treasurer@spartan.coop!