Budgeting and financial Planning

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1.You are to begin your Budgeting and Financial Planning Course by preparing your short-term and long-term goals. What will it take to achieve those goals? What limitations and opportunities do you have for meeting them? Consider your financial data and choose a time period and frequency for checking your progress.

2.Why is a budget so important in personal financial planning? What kinds of problems can you resolve by employing your personal budget? What kinds of goals can you attain through changes to your personal budget?

NB: Clue to the assignment –

  • A budget is a process that mirrors the financial planning process.
  • The process of creating a budget can suggest goals, behaviors, and limitations.
  • For the budget to succeed, goals and behaviors must be reconciled.
  • Budgets should be prepared conservatively:
    • Overestimate costs.
    • Underestimate earnings.
  • The appropriate time period is one that is
    • short enough to limit the amount of data,
    • long enough to capture meaningful data.