How to Make Financial Projections to Plan for the New Year: A Simple Guide for Women ODs
As the new year begins, it’s the perfect time to set yourself up for success—both personally and professionally. One way to do this is by creating financial projections. Don’t worry if the term sounds intimidating; this guide will break it down into simple steps you can follow.
What Are Financial Projections?
Financial projections are your money roadmap for the future. They estimate your income, expenses, and savings over a specific period—like a year. Think of them as a forecast of your financial health, helping you visualize where your money will go and how you can make it work for you.
Why Are Financial Projections Important?
Making financial projections allows you to:
- Set Goals: Whether it’s buying new equipment for your practice, paying off student loans, or planning a dream vacation, projections give you a clear target.
- Avoid Surprises: You’ll be prepared for expected and unexpected expenses.
- Stay on Track: Regularly comparing actual numbers to your projections keeps you accountable.
- Reduce Stress: Knowing where your money is going gives you peace of mind and confidence in your financial decisions.
What Do People Use Financial Projections For?
Projections can cover all aspects of your personal and business life. Here are some examples:
- Personal:
- Planning a family vacation
- Paying off debt
- Saving for a house purchase or renovations
- Investing in personal wellness
- Business:
- Purchasing new equipment
- Expanding your practice
- Hiring a new team member
- Setting up an emergency fund for unexpected expenses
5 Fundamental Steps to Create Financial Projections
1. Gather Your Financial Data
Start by looking at your current financial situation. For personal finances, review your income, bills, and savings. For your business, examine your revenue, recurring expenses, and past financial statements. This step gives you a clear baseline to work from.
2. Define Your Goals
Decide what you want to achieve in the next year. Be specific! For example:
- “I want to save $5,000 for a family vacation.”
- “I need $15,000 to upgrade the equipment in my office.”
- “I want to pay off my $10,000 student loan balance by December.”
3. Forecast Your Income
Estimate how much money you expect to make. For your personal life, consider your salary or any additional income. For your business, project revenue from patient visits, product sales, or services. Be realistic—don’t overestimate.
4. Anticipate Your Expenses
List your fixed and variable expenses. Fixed expenses are predictable (e.g., rent, utilities, salaries), while variable ones can fluctuate (e.g., holiday gifts, business supplies). For personal expenses, include fun things like spa days or a new wardrobe, so you’re budgeting for what makes you happy.
5. Create a Plan and Monitor Progress
Using the information from steps 1-4, draft your financial projection. You can use tools like Excel, financial apps, or even pen and paper. Revisit your projections monthly to compare them against actual numbers. Adjust as needed to stay on track.
Final Thoughts
Creating financial projections doesn’t have to be overwhelming. With a little planning, you can gain control over your finances and set the stage for an incredible year. As women ODs, we juggle many roles—clinician, entrepreneur, mom, and more. By taking the time to plan our finances, we empower ourselves to thrive both personally and professionally.
So grab your favorite latte, sit down with your numbers, and start dreaming up the amazing things you’ll achieve this year!
What’s your #1 financial goal for the new year? Share it in the comments below—we’d love to hear from you!
