Personal budget planning is a wise move when managing personal finances. Before creating a household budget, take time to determine your financial goals for the next 10, 20, 30 or more years.
Where would you like to be? On the golf course or a cruise, buying a starter home for your child? Hitting the road in a comfy full-service RV? Traveling to all those places you've wanted to see?
Or maybe you'd like to venture down a new career path that has been out of reach all those years. Just because you have a life of experience in your current job doesn't mean you cannot switch to something you enjoy in middle age.
Pipe Dream Financial Goals?
Too many of us end up in a job we truly hate because we had little choice. Perhaps you needed to be the breadwinner for your spouse and family and had to take whatever job came along. Or maybe you went into a profession because it was the thing to do (your parents forced you or it was the family business).
When we approach our working years, many of us have no idea what we want to do. We just go with the flow. We let our natural strengths guide us based on how well we do in school. Yet, these are not the jobs we would choose for ourselves if we had the chance. In many cases, they are dead end jobs with little chance for advancement or increased income.
All of your much desired financial goals become nothing more than pipe dreams.
There's nothing worse than not being in control of your life. Being in a job that dictates how little you can make or limits how far you can go can be devastating to your self esteem. It all comes down to personal budget planning and goal setting.
There's a saying, "Fail to plan and you plan to fail". It's usually used in reference to business. You can't set up an effective money-making business unless you have a plan in place that will steer your business where you want it to go.
Let's say you want to start your own garden center. You jump right in, buy your property, grab the first suppliers that come along and set up your checkouts ready to make money. The problem with this approach is that there is no plan to guide you. The property might not be in the right location, the suppliers could be the most expensive which cuts into your profits, and your customers might be seeking something totally different.
Good Personal Budget Planning
Good personal budget planning will include a breakdown of how you will meet the needs of your customers, meet all the obligations of running your company, and how much money you expect to make from each sale. It also will cover forecasts of how much you anticipate you can make in the next year, 5 years and 10 years.
By doing this, the business will have a much better chance of succeeding because you have given yourself specific goals that you want to achieve and deadlines to achieve them.
The same holds true with your life.
If you do not have set goals and a plan to get there, there's a very good chance you'll never make it. You need to plan the life you want in the next 5, 10, 20 years and into retirement. Then, you need to know how you will handle your finances to make all those goals possible. By bringing your goals and finances together into one plan, you will have an excellent chance of getting from life exactly what you want.
Think of your life as a business – the business of life that needs good personal budget planning that guides you to achieving specific financial goals along the way.
The next article in this budget planning series continues with setting financial goals in personal budget planning by completing some exercises.