Usually budgeting happens around the first of the year along with all our resolutions. With good intentions, a piece of paper is created that reflects some numbers for our “budget”. And surprisingly, our anticipated income is more than our budgeted expenses. Everything is right with the world. We high-five all around and celebrate our new financial direction.
Our “budget” is then put in a drawer and tucked away in the back of our mind. When a financial crisis strikes, and it will, the drawer is opened, the “budget” is revised, and heads shake as to why a crisis has happened. After revising the “budget”, it goes back in the drawer until the next pressing crisis comes along. Normally, around mid-year, after Jones-itis has once again consumed our chaotic financial lives we throw your hands up and declare “budgets don’t work”. Sound familiar?
And, you know what? I agree. A budget by itself is worthless. I might even argue that if you’re doing just a “budget”, it does more harm than good. Budgets by themselves don’t work. If you don’t compare your budget to your actual results each month, you’re wasting your time.
Comparing your actual results each month with your budget is like getting a financial report card that gives you feedback and accountability so you can make adjustments and stay on track towards your financial dreams.
Think about it: in most all of the successful areas of our life we have a goal (budget) that we compare actual results against and then make adjustments that propel us towards that goal. But when it comes to our personal finances we seem to think having a budget that is compared to actual results it not required. How crazy is that?
If you tired of doing the “budget” thing that never works here’s an option.
Try using my Business Profit Report which is Step 7 in my Wealth Builder 10 Steps. This simple form combines the budget, actual results and the variance between the two for your income, monthly expenses and profit/savings.
In the example below you can see Joe and Judy’s Business Profit Report for their life business, J&J Company. Imagine the financial peace and confidence you would feel if you were using this tool:
Being able to develop a good budget, then either manually or with the use of a personal financial software program, record your actual results and make changes based upon the variance, is one of the most important, if not the most important step in achieving uncommon wealth.
So, who you gonna call if you need help getting rid of those worthless budgets? Me. I would be honored to help you develop a wealth building plan to achieve your uncommon dreams.
Let’s start building uncommon wealth the right way.