HOA Fees and Your Budget: How to Plan and Manage Your Finances Effectively

HOA Fees and Your Budget: How to Plan and Manage Your Finances Effectively

Your HOA neighborhood has a pool, park, and a ton of extra perks to enjoy. In exchange for having access to these special amenities, homeowners are required to pay HOA fees.

These fees go toward community-wide upkeep. Homeowner's associations will also use the money to plan special events for everyone.

However, if board members stretch the HOA budget too thin, homeowners may be forced to pay extra money. As you can imagine, this is something that nobody wants to do.

So, how can your HOA avoid running out of money? Check out this guide for a list of association management tactics that work in West Cobb, Georgia.

Reflect on Your Current Financial Situation

The first step in financial management is to reflect on your HOA's current financial situation. Locate and comb through the records for the past few years. Compare these records with the budget set for the year they were written.

Where did you spend too much? Where did you spend too little? Knowing this information will help you better establish your future budgets.

Plan a Budget Meeting

When in a meeting, it can be tempting to bring up all the important talking points at once and get it over with. However, your budget deserves to have its own separate meeting.

If you try to talk about the budget at the same time as you go over other community matters, you risk having a half-hearted discussion where nothing gets decided.

Board members are ready to go home, so they may try to rush through the decision-making process. Instead, it's better to have a separate budget planning meeting where everyone can go in with a clear enough mind to focus on the main objectives.

Streamline Your Accounting Processes

If you don't have a lot of accounting experience, it's easy to make a mistake when calculating your budget. That's why many HOAs streamline the process by hiring a dedicated accountant or a property management company.

They can tackle tasks such as preparing tax returns, recording transactions, and discovering problems in your financial operations and fixing them.

Avoid Special Assessments

Your budget is on track until a hurricane blows through the area. Now, you're having to use some of the HOA budget for repairs. This isn't an uncommon occurrence.

In situations such as these, your HOA manager may have to issue a special assessment. That means asking homeowners for extra money to cover expenses.

Doing this one or two times will annoy homeowners, but it won't be enough to start a riot. However, you can't make a habit out of it. Avoid special assessments by planning ahead.

Leave wiggle room in your budget to account for disasters. Take pictures and submit them to your insurance company to collect money for repairs.

Manage HOA Fees and Keep Your Finances in Check

HOA fees are a bill that homeowners pay in order to stay in a homeowners association neighborhood. It goes toward keeping the community up and running.

As a board member, it's essential that you use these fees effectively. PMI Cornerstone has been helping HOAs in West Cobb, Georgia, manage their finances for over 10 years. Schedule a consultation today!