Overview: Budget Planning
Budget planning is an important part of maintaining your financial well-being.
Essentially, it is taking the process of creating a budget and extending it into the future, so that you can obtain a long-term view of your finances.
Budget planning helps you prepare for those expenses that creep up unexpectedly, or which aren’t accounted for in your regular monthly budget.
Budget planning can be done for an annual, semi-annual or any other period.
Look at your monthly income and your monthly expenditures, but then start to forecast how those things might change.
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For instance, do you have a raise on the horizon?
Or do you have months where your company typically has a reduction in hours that you have to plan for?
Budget planning also takes into consideration extra expenses.
For instance, if you pay for your auto insurance on an annual basis you need to plan for it.
You might also have things like back-to-school spending for your children.
This process is designed to help you plan for things that don’t fit into the regular monthly budgetary assessments that you might do.
It can also help you better understand both how much you can save, and what you may need to save for.
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