‘Tis the season for HOA managers to start thinking seriously about their budget for the coming year! Indeed, stores are already putting out their Christmas decorations, which means there are only a few weeks remaining before it’s time to finalize the 2014 HOA budget. Association-governed communities are smart to begin planning well in advance—but how? We’ve rounded up eight critical budget tips, in the bullet points that follow.
- Make a prioritized list of your community projects. There may be several things you’d like to do within your community, but you don’t have to do them all at once. In order to keep assessments at a reasonable level, prioritize what really needs to be done in the coming year, and what can wait until a later date.
- Review vendor contracts. Even if a vendor is under contract for the following year, it is important to review the details of that contract, seeing if there is going to be any escalation clause triggered.
- Review your landscaping budget. This is an area in which may associations spend a lot of money, but it is also possible to find big savings. If you need a little extra money for other projects, you might cut back on how many shrubs and flowers you plant next year, picking up a little spare change in the process.
- For associations that pay utility costs, take into account rising rates. Most of the time, utility costs increase by a few percent each year.
- Shop around for places where you can buy products—pool chlorine, grass seed, and so forth—in bulk, saving some money in the long run.
- Make sure that you’re budgeting some money for your HOA reserves; this will come in handy should there be any emergency need that arises.
- Plan to cover all insurance deductibles, for community properties and vehicles.
- Finally—and crucially—start planning right away. It’s never too early to begin thinking about next year’s budget, and getting a head start can ultimately make the process go much more smoothly.