Budgeting vs Financial Planning
Money maps for your present and your future
Getting a handle on your finances and figuring out how to best plan for your financial future can be stressful. Adding to that stress are unhelpful articles telling you to cut most, if not all, of your spending to save for retirement. That advice is as useful as a $2 bill (it’s real!). The best and easiest way to start planning for your financial future is by creating a realistic budget. Once you’ve set up a budget, you can start mapping out your financial future with a Financial Plan. Let’s take a look at each one.
A budget is a useful tool to get a handle on your money in the near-term. It’ll help you identify where your money is coming from (income) and what it’s being spent on (expenses), along with how much is left over. It also provides an overview of your spending habits, which helps you easily identify whether or not you’re overspending. Once you have a budget in place and have maintained healthy spending habits, you’ll most likely have some extra cash flow. Most people will either save or spend the excess money because they don’t have a plan in place. This is when a Financial Plan comes in handy.
A Financial Plan provides guidance on how to achieve financial security now and in the future. You’ll work with a financial planner, typically a CERTIFIED FINANCIAL PLANNER™ (CFP®) Professional, to go over every aspect of your financial picture, including budgeting, debt management, financial goals, retirement planning, insurance coverage, and other financial matters depending on your situation. With the recommendations outlined in your Financial Plan, you’ll know how to allocate your extra cash flow so it’s working for you.
Creating a budget is essential to achieving financial success, but it’s only concerned with what you’re currently doing with your money. To achieve your financial dreams, you’ll need a Financial Plan in place to know how to put your money to work for you.
Get started with Budgeting and Financial Planning today by scheduling a free call with one of our CFP® Professionals here.