What factors should be considered when budgeting for events?

Event budgeting doesn’t have to be difficult

Small or big, events can become a financial strain. Setting a budget for an event helps to reduce, or even to eliminate the difficulties associated with event planning.

A budget and clear spending boundaries protect from spending more than expected. Clear spending boundaries for every aspect of the event, can lead to every euro or dollar “going longer”. Moreover, detailed tracking of spending helps to realistically adjust expectations for any future events.

A budget starts with a plan, and the setting the scale of an event. Choosing a strategy for not going over budget also helps.

Find out about these factors of event planning, and even more, from this article by Money Bear Club.

Planning the event

Every good thing starts with a plan. That includes the event and its budget.

Although it may seem at first that the planning of an event, and the planning of the event’s budget are the same thing, they aren’t. Planning of an event precedes the planning of the budget. It helps to make better adjustments to the budget. Without one or the another, the event planning process becomes more complicated than it has to be.

An event plan can be created by looking into 4 simple factors:

  1. Scale;
  2. Importance;
  3. Theme;
  4. Time until the event.

The scale of an event is a very important factor for creating an event plan. Large-scale events, with many participants, will require event plans with detailed activities for different participant groups. Plans for smaller events should benefit from more detailed activity plans.

It’s only rational that some events are more important than others. The importance of an event determines the emotional investment into the planning of the event. When planning the most important events in life, event planners are bound to become somewhat irrational in their actions.

This means that for events of highest importance, plans should be as simple, and as strict to changes as possible. Else, the event planner risks making unnecessary changes complicating the event and its realisation process.

Different event themes require different types of planning. For event themes which are focused on people and participation (e.g. cowboys, sports), event plans should focus on contingency plans if something were to go wrong. Themes dependent on weather conditions also should emphasize alternative plans.

Event plans for other themes won’t require extensive contingency plans. In contrast, plans for events not dependent on external conditions should focus on any possible internal malfunctions. Loss of electricity, and any potential similar problems, should be addressed in plans for these themes.

The closer the event’s date is, the more strict the event plan will be. It is useful to limit expectations and the complexity of the event plan, when the event’s date is approaching fast. This should be done in order to escape overworking, and to fully enjoy the event.

Planning the event’s budget is an easy task when an event plan already exists.

Of course, the scale of an event is the determining factor for the event budget’s size. The closer the event’s date is, the more should the planner be prepared to allocate to the budget.

When the event’s budget size is set, the budget should be broken down along the lines of the required spending for different aspects of the theme.

Some aspects, like food, can be used to save money on (e.g. by using home-made food instead of catering). For other aspects, like the entertainment for guests, saving money can lead to the decrease in the quality of the event.

It’s also useful to set a 5% to 10% “cushion” for unexpected increases in spending. Goods can unexpectedly sell out, and their replacements could be pricier.

Even with a clear plan and a budget, it is possible to run into financial problems related to the event. Weathering them is a matter of flexibility in accepting changes to the plan, and coming up with creative solutions.

Take the unconventional route

Unconventional spending and strategies is a possibility for event budgets. Taking the unconventional route can lead to reduced costs. Or, to getting more value out of the set budget.

The easiest way of making unconventional spending decisions is to find mistakes in the commonly used models.

Firstly, this requires the knowledge of how most event spending is done. Finally, creative questioning of the value of these spending models helps.

unconventional event spending

Unconventional spending for events. Copyright: Money Bear Club.

A typical spending model for an event’s budget is a haphazardly constructed one. An event plan made from the event’s budget won’t be good neither for the wallet, nor for the quality of the event. Moreover, the typical spending model prioritizes spending on parts of the event that occur first.

It’s already been discussed how to create an event plan and later, the event’s budget. Avoiding spending on event parts that chronologically occur first, can be done by ranking different parts of the event by their importance.

Finally, typical spending for event organization is done without asking other interested parties for their advice. Not all friends and family can offer good advice or help for decreasing spending. Nevertheless, hearing different perspectives may at least help to validate that the event planner is on the right track.

Getting more value out of a set budget can be achieved by spending money on goods that can be used more than one time. Instead of lighting that has to be bought again, buying multi-use lighting will be the smart choice. Instead of one-time entertainment, like sky lanterns, products that can be used more than once should be bought.

The initial prices of multi-use products can seem steep. Yet, their cost per use will decrease quickly after multiple uses.

Conventional thinking related to event planning, directs event planners to do everything on their own. Hiring more help is painted as an undesirable choice, as it increases upfront costs.

For some, hired help may seem like unnecessary spending. Yet, with more servers/chefs/entertainers, the event’s quality is bound to increase. What event planner wouldn’t want that?

Budgeting for smaller events

Setting a budget for smaller events can become a complicated task. On one hand, there’s less spending to do when the spending size is small. On the other, a small budget can make organising the event a challenge.

When there’s less money to spend, each individual purchase could become a hard choice to make. This happens because each purchase represents a larger share of the whole budget, compared to purchases for a large event.

There’s an easy way to avoid spending time agonizing over each purchase. Especially, if they all have similar qualities and prices.

Using an online random choice generator should help to make faster decisions. Moreover, if all spending choices seem equal, using randomness will make the spending decision less susceptible to any personal biases.

A budget for a very small and intimate event can be reduced by using things that have already been bought. These include decorations already used at home. Or, food that has already been bought. They all are appropriate to use for very small events. Especially, if the event happens in a house or a garden.

Budgeting for large events

Large events require far more budgetary oversight than small events. That’s because even a small increase in spending per guest, will create massive increases in the budget as a whole.

Any addition can increase twice or even thrice in cost, if it is an addition to a large event’s budget. There’s a rather simple way of how additions to large events contribute to fast-growing costs.

Let’s say an event planner decides that string lights are a necessity for a birthday party in a garden. String lights aren’t a large expense. Yet, because the party’s big, several boxes of string lights will have to be bought. Else, not all guests will be able to appreciate this decoration.

large event costs

Multiplying costs in large events. Copyright: Money Bear Club.

Same can happen with other decorations or entertainment for large events. An addition to a budget may seem small at the first glance, but balloon the costs quickly. Keeping an eye on any new additions to a budget should help to control it.

Not all people are able to relinquish control over the planning and the execution of an event. There are benefits to this view in cases of organising smaller events.

For larger events, professional event planners could be the right choice. Without one, taking care of any hired staff, entertainers, or catering could become a problem.

How to avoid going over budget

There are two ways to approach the issue of going over budget.

The first way: to cut the quality of some parts of the event.

The second way: to find free opportunities instead.

Neither way is better or worse than the other. They both have downsides.

In some situations, one or the other strategy can help event planners to avoid going over budget.

Cutting the quality of some parts of an event is the conventional way of avoiding going over budget. This strategy, compared to the strategy of finding free opportunities, is particularly useful for events with a tight preparation time or once a lifetime events.

If this strategy is used, the event planner has to determine the most important parts of the event.

Let’s use the example of a wedding. The most important parts of a wedding can be the location, and the quality of the reception.

This means that these parts will be reduced in quality only in the event if there is a high risk of going over budget. In contrast, other parts of the event, like the clothes of the groom and the bride, the photo/video services and the honeymoon, can be used to slash costs.

Cutting down costs on just some parts of the event, requires the participants to be able to recognize that prioritizing will lead to an overall higher quality event. Cutting down costs on all parts of an event will make the whole event bland. Cutting down on just some parts, will make the event a higher quality one.

The second strategy of finding free opportunities (extensively discussed in How to do extreme budgeting in 2019), requires creativity and some out of the box thinking.

It is a contrarian and an unconventional strategy. Instead of cutting down the costs (and the quality of parts of an event), the strategy directs its users to get more, for free.

How would this strategy manifest itself in an event going over budget? Let’s look at a birthday party as an example.

The first step would be to determine, and to categorize, all parts of the event. In a hypothetical scenario these would be food, entertainment, and decorations.

The next step to avoid going over budget, would be to sum up the vision of the event in a few sentences. Things like the atmosphere of the event, and the chosen theme should be summarized.

Finally, the work can start. Going by theme of the event, the event manager then can brainstorm free opportunities for the categories determined in the first step.

In the case of a birthday party, free opportunities for decorations are almost endless. Cardboard boxes from stores can be used as decorations (especially if work is done to customize them). A party with a theme in any way related to nature can use thrown away flowers, branches or any other type of flora. Imagination’s the limit!

Finding free opportunities not only decreases the overall budget required for an event. This helps to avoid going over budget. It also can lead to one of a kind customizations for events. And who doesn’t want their event to be original?

There is always a way to save

A budget and a strategy for not going over budget, should help to at least stay inside the chosen spending range. Finishing under budget should be celebrated, as it is not a common occurrence.

For those dealing with spending going over the set sum, there is always hope. No matter how little leeway there seems to be, there is always a way to save. Even if through higher upfront costs.

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