by Kristen M. Anderson

Created on: June 20, 2009   Last Updated: June 27, 2009

Creating an event budget can be a daunting task, particularly if you don't have a lot of event planning experience or if funds are limited.

The first step to creating a basic event budget is to brainstorm all of the event elements, from invitation postage to food to parking. For this exercise, you can use a flipchart with lots of space to write your ideas, an Excel spreadsheet, or pencil and paper. Don't worry about cost at this point; your goal is to document what the event will look like.

Next, organize the items into meaningful blocks. Some event planners organize their budgets chronologically (planning, execution, and follow-up). If funds are tight, you may want to make three lists: must have, nice to have, and don't need to have. If your event will be held at multiple venues, consider organizing your budget by venue (ceremony and reception sites, for example). To create a truly simple budget, try grouping event elements into basic budget categories such as invitations, location, food, and entertainment.

Looking at your budget categories, prioritize each category so you know which is most important element and may require the most funds. For example, venue cost is typically the most important and the most expensive element of planning an event, followed by food/drink costs and entertainment, etc. However, if you really want to fly people in for the event, transportation costs will be your most critical element and everything else will fall behind that.

The next task is to assign costs to each event element. This is perhaps the trickiest part of creating the budget. Without knowing the cost of food for 100 people, for example, you'll need to contact two or three caterers to obtain a rough idea of cost. If you have already prioritized the budget items, start from the top by finding out the venue cost, followed by the cost of food, etc. It may be helpful to review previous event budgets to accurately assign costs.

Once you have allocated funds in the budget for the big ticket items, parcel out the remaining funds for smaller event elements. Take a long hard look at each budget item and decide 1) Do I need to include this component? 2) Can I find a cheaper way to do it? 3) What would happen if I eliminated this item?

Once you have created budget categories and assigned cost to each item, keep track of actual funds that you spend. Chances are some elements will cost more or less than you had anticipated, giving you float funds for other event items (or requiring you to do some painful budget cutting).

Creating an event budget is very similar to creating a home budget. By organizing event costs in a way that makes sense to you, an event budget can be a valuable tool to track spending and to provide a historical background when it's time to play your next event.

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