When most homeowners receive the Annual Budget Spreadsheet, they usually look only at one cell… the Monthly Assessment Amount. When that number goes up, they get upset and demand answers from the Board at the next meeting. The best way to combat this is to help communicate the budget specifics to the owners in a way they will understand.
We will help you show the membership to look beyond the rows and columns of a spreadsheet and get on board with the community’s financial plan.
Showing the ownership, the full financial spreadsheet could be quite overwhelming. Instead, present them with the “Three-Bucket” Strategy. These buckets break down the budget’s main categories.
- The Essentials – Operating: These are items you can’t do without – Electricity, water, trash insurance.
- The Lifestyle – Maintenance: These items give the property high value – Landscaping, pool service, entry gates, and social events.
- The Future – Reserves: This protects the future from Special Assessments – Saving for roof replacement, repaving, re-siding, pool renovation, etc.
*Putting these items into a pie chart rather than spreadsheet cells is often easier for members to understand visually.
When discussing The Future Bucket – Reserves, use the comparison of the Reserve Funds to members’ savings accounts. Where you save up for rainy day expenses. Help them understand that having underfunded reserves now can lead to a Special Assessment of potentially thousands of dollars in the future. Paying a little now can prevent a huge bill in the future. Explaining to them that the Board is not simply “hoarding money”, but prepaying the roof replacement in the future! Having an HOA Reserve Study is a wonderful tool to ensure you are putting the right amount of money into that Future Bucket as well!
When discussing other increases, it is helpful to remind members that, in 2026, costs for insurance, utilities, labor, and essentially everything else will increase. Share specifics, such as your landscaper increasing their contract by 7% or insurance increasing by 15%. If you have done your due diligence in shopping for those contracts, you can share with them that you compared costs and that they were on par with others. I have always tried to explain to Boards and members that their vendors have to increase their contract prices because their costs increase as well… and if the Association’s assessments don’t increase as well, you are already losing money.
When planning the right HOA budget communication with the membership, it can be incredibly beneficial to hold a Budget Town Hall. This is an informal opportunity for members to ask questions and discuss the presented “buckets” in the budget. This can de-escalate the tension in a more informal environment. Allow members to ask questions with a 2-3 minute timer so they can be “heard”. The Board can hold its official vote after. Please see your governing documents on the official process for approving a budget in your community and in your state.
We offer several tools for Boards to plan and create a budget for their community. Feel free to shop those tools HERE.
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