Spending Plan, Spending Plan, Who’s Got the Spending Plan

There are spending plans for startup businesses and budgets for corporations.  There are department spending plans and city, county, and state budgets.  There are even personal and family spending plans as well as vacation spending plans and monthly spending plans.  There are sales budgets and cash flow budgets.  There are even marketing and production spending plans.

So many spending plans and budgets…

Seems like if all of these spending plans and budgets exist and all different types of organizations and groups use them, there must be something about them that works.

When most people hear the word budget, what do they think?  What do you think?  Does control come to mind?  Do you think that now I can’t do what I want?  A budget or spending plan is a measure of control, but it doesn’t work against you, it works for you.

A spending plan or budget is defined as a plan for meeting expenses in a given period of time.  In other terms, an estimate of how money will be spent.

In summary, the purpose of a spending plan is to:

  1. Provide a forecast of revenues and expenditures or a model of how our finances might perform if certain strategies and plans are carried out.
  2. Enables your actual spending plan against the forecast or estimate of planned expenses.

If the actual figures delivered through the spending plan period come close to the estimate or forecast, it suggests that you have been successfully driving your finances in the intended direction.

On the other hand, if the figures diverge from the plan, this could mean that we are out of control. 

There are many different types of spending plans or budgets.

There are spending plans for startup businesses and budgets for corporations.  There are department spending plans and city, county, and state budgets.  There are even personal and family spending plans as well as vacation spending plans and monthly spending plans.  There are sales budgets and cash flow budgets.  There are even marketing and production spending plans.

So many spending plans and budgets…

Seems like if all of these spending plans and budgets exist and all different types of organizations and groups use them, there must be something about them that works.

A spending plan is a plan for spending money that is tied to an overall goal for the group or organization.  In an organizational context or business sense, all expenses are tied to the spending plan.

For example, in the retail business, you have a sales budget or what some call a sales estimate.  This could be daily, weekly, or monthly.  In this environment, you must meet the sales budget or estimate!

This is because everything, all expenses, is tied to the sales budget.

Salary costs and overhead, shipping, and even markdowns are all tied to the sales budget.  If the sales budget was not meant, then to have a positive cash flow, to stay in the green, to keep the budget at a break-even; something in the budget has to be cut – spending had to be cut.

More often than not it was salary cost, but something had to be cut.             

My point is that if organizations and groups use budgets in this way, why can’t you.

Why can’t you estimate your spending with a budget and then if you do not meet the budget cut some spending? 

That company that you bought your car from and the company that you bought your cell phone from doing it that way.  That is, they manage the finances with a spending plan or budget estimate, and then if they do not meet the estimate, they start cutting.

If you meet the estimate, if you spend according to plan, you are good- there is no cutting necessary.

Try it…a budget may benefit you and take you to a place of financial security you never imagined.  Share your spending plan strategy and subscribe to my blog and learn how to create and manage a winning spending plan for you and your family.

#GoldenRules #youneedaspendingplan #financial management #spending plan

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