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What Should An HOA Budget Template Have?

hoa budget template

Every homeowners association relies on a carefully crafted budget for its yearly expenses. But, what does an HOA budget template look like? And what should it include?


What Is an HOA Budget Template? Why Is It Important?

Homeowners associations operate on an annual budget usually prepared by the HOA board or the budget committee. This budget serves as a guide that the board will use for the coming year’s expenses. Additionally, it is from this budget that homeowner dues are calculated.

It’s easy to say that an HOA budget is important. But, what exactly makes it so essential to a homeowners association?

First of all, the HOA budget has a direct impact on the association’s finances. Any board that uses a “go with the flow” approach to its expenses is destined to drive its HOA into financial ruin. The budget acts as your board’s guide — letting you know what you should spend money on and how much. This ensures that you don’t spend too much on a single line item and run out of money for other necessary expenses.

Secondly, the HOA budget allows you to determine how much to charge owners in dues. Without a template, you may end up charging too little or too much, which are both equally bad. Charging too little will put your association in a deficit and force you to levy special assessments. On the other hand, charging too much could tempt you into spending more money than necessary, simply because the funds are available.

A budget template also makes it easy for the board to plug in amounts for the expenses. This allows for a smoother and stress-free budget planning session for everyone involved.

Finally, the HOA budget template allows for transparency in your association. Homeowners have a right to know where their money is going, and the budget addresses that. In some states, the board is even required to present the budget to the membership for ratification. North Carolina, for instance, has such requirements for both HOAs and condominiums.


What Is Included in an HOA Budget Template?

You already know that the HOA budget plays a critical role in an association’s finances. Of course, there is a difference between saying you need a budget and actually preparing the budget. What should an HOA budget template even include anyway?


Expected Income

The first part of any HOA budget should cover the expected income or earnings of the association. This usually comes in the form of dues and assessments, though it can also include things like interest income.

If your association rents out its common facilities or amenities, income earned from rentals will fall under this section as well. Of course, it is not always possible to anticipate rental income for the coming year, unless it is a fixed event that happens annually.


Anticipated Expenses

The expenses portion of the HOA budget template is typically divided further into sections. There is no single correct way to prepare this part of the budget, as different HOAs may adopt varying styles. However, it is important to create an organized format that homeowners can easily interpret.

The following sections typically appear under the “expenses” portion of the HOA budget:

  • Administrative Expenses. This includes management fees, legal fees, bank charges, office supplies, the cost of preparing newsletters, and even reserve studies.
  • Maintenance Expenses. Line items under this section can include landscaping costs, cleaning services, maintenance supplies, electrical costs, plumbing costs, and the like.
  • Utilities. Under utilities, you have expenses such as gas, water, electricity, sewage, phone bills, and even trash collection costs.
  • Fixed Costs. This includes recurring costs that usually come at a fixed rate such as insurance premiums, property taxes, and annual report filing fees (Secretary of State).


Reserve Contributions

Lastly, every HOA budget should include reserve contributions. This is the amount the association should set aside in its reserve fund for future major repairs or replacements. The board must maintain the proper reserve level, which is usually 70 percent funding. To know how much is considered fully funded for your HOA, it is important to conduct a reserve study.


Sample HOA Budget

Make your budget planning season easier and less stressful with the help of the homeowners or condo association budget template below.

HOA Budget Template


Download Your HOA Budget Excel Template Here


Tips for Planning Your Next HOA Budget

Preparing an annual budget for your association can come as a challenge, especially if you don’t have a background in budgeting or have simply never done it before. As part of your HOA board, though, it is one of your duties to plan for the coming year’s expenses. Here are some tips you can use when drafting your next HOA budget.


1. Review Past Budgets and Reports

One of the best ways to ensure you’re on the right track is to look at past budgets and financial reports. When you do this, you can determine how much you spent on every line item in the previous years. This will give you an idea of how much you should expect to spend this year. Reviewing past reports is always a good place to start when you are planning your HOA budget.


2. Send Out RFPs

sample hoa budgetWhile it is good practice to review past budgets, they can only tell you what happened in previous years. But, things can change over time.

For instance, vendors can increase their rates or give special discounts. Before preparing your budget, it is a good idea to send out requests for proposals to vendors and suppliers. Doing this will allow you to gauge how much to allocate per service or expense.


3. Add a Buffer

This may seem like an obvious tip, but it still needs to be said. When planning your HOA budget template, don’t forget to add a buffer. Doing so will give you extra room in the budget to cushion unexpected costs or unforeseen increases. Of course, it is equally important not to go overboard with your buffer.


Easy HOA Budget Planning

The homeowners association budget preparation season can be a taxing period for HOA board members, but it doesn’t have to be that way. With an HOA budget template, you can easily input the expenses and amounts you expect for the year. From there, you can determine how much each homeowner has to pay in dues.

Of course, with Condo Manager’s HOA management software, budget planning is made even simpler. With a dedicated budget planning module, all you need to do is plug in the numbers and let the software do the rest. You can even export the budget as you see fit. Call us today at (800) 626-1267 or contact us online to set up a free demo.