Planning is Overrated

If you believe that planning is overrated and unless you were born into a wealthy family, good luck in purchasing that dream car, owning a home, or starting and maintaining a business. You know the saying, “those who fail to plan, plan to fail.” One important element of planning is budgeting.

Simply put, a budget is an itemized summary of likely income and expenses for a given period. Whether you’re a business owner, student, or for personal use, a budget is an invaluable tool that can help you prioritize your spending and manage your money–no matter how much or little you have. A budget is important because its the road map (plan) on how to reach your financial goals.

A well thought out budget will help you identify your income and expenses. It also makes clear any excess spending and extra income. Proper management of your budget is very important. Comparing actual to budget amounts will allow you to adapt quickly as your financial situation changes. With a budget, there’s no reason to panic or wonder if you have the money–you already know. This sense of financial clarity is a key to financial freedom.

Today, using a spreadsheet, create your budget by listing your income and expenses and comparing the two totals. Once your budget is created develop goals to help plan your financial freedom. A good tip is to share your budget and goals with your accountability partner.

For more information on budgeting, or for assistance with creating a budget for yourself or your business, contact Rudolph Isaacs, CPA.