Smart Driving

Max Kvidera | August 01, 2011

Planning Ahead

Keeping a budget will help you track costs and save money on the road

Setting a budget alone won’t make you successful, but it will tell you how your business is performing. A budget will help guide you where you want and need to spend money. If nothing else, a budget might provide some financial discipline.

The time to start a budget is now. For an owner-operator, establishing a budget should precede going into business, advises Barry Sullivan, lead business consultant at financial services firm ATBS. “Oftentimes guys will get into a lease-purchase program or buy a truck and do a budget afterward,” he says, “which is the cart before the horse.”

Sullivan says a budget will demonstrate if a proposed business is likely to succeed. The budget will show whether the income is sufficient to support both the business side and expenses back home. If you’re the sole means of support, setting a budget is critical, he says.

Eric Cook of Peak Trucking Consultants says a budget provides a “roadmap of how their expenses compare to the income they can generate.” He says it should be prepared before you buy a truck to see whether the proposed venture makes financial sense. He recommends researching fuel costs where you’ll be running, potential revenue per mile and what truck payment you can afford.

Pat Musgrave, owner of, says a budget will show where you’re spending your money. “The budget is not there to say you can’t spend it,” he says. “It’s there to say, one, you have the money in case you need it, and, two, it guides you where you should be spending it.”

What to include

Sullivan says a budget doesn’t have to be complicated. You could set one up on a spreadsheet program on your computer or draw one up with a pencil and legal pad. “People don’t like the word budget,” Sullivan says. “That’s why it’s equally referred to [at ATBS] as a business plan.”

In a one-page budget, Sullivan says include fixed costs such as your truck payment and insurance, variable costs such as maintenance and fuel, and your personal expenses, such as mortgage or rent, credit card debt and child support. Determine your personal expenses on the road, such as meals, showers and daily incidentals. Musgrave says he has a trucker client who withdraws a daily stipend in advance to cover personal expenses between pay periods.

An essential on the expense side is a maintenance fund. Each period you should put a regular amount aside to cover maintenance costs large and small. If you don’t a big repair bill could knock you out of business or deeply into debt.

Musgrave says he has a client who faced a $6,000 repair bill and was fretting where he was going to get the money to pay it. The client was reminded he had a repair account and found out it had grown to over $14,000. “He wrote a check and he was back on the road,” he says.

Musgrave says everyone has a “soft spot,” a place they regularly spend money. He has a client who enjoys going to auto races weekly. “We put in $50 every week for his racing,” he says. “He knows he’s going to spend it, so we put it in the budget.” strives to maintain an open forum for reader opinions. Click here to read our comment policy.