Budget! A word feared in most households.
One of the biggest causes of arguments in households is money. We battle to speak about it, so we push it to the side to be discussed another day. Of all money subjects, a budget is the most important yet neglected tool we should all use.
It is easy to see a budget as something negative, restrictive, controlling, and even untrusting. But if we view it differently, it can be the base on which we build the current and future lives we want. When we want to build a business, a house, buy a car, or go on holiday, we start with a budget which reveals certain options or possibilities to us.
Personal or Household Budget
In a similar way, we should have a personal or household budget which covers fixed and lifestyle expenses, including short- and long-term savings. This budget must not be more than the family income, or it will not work or give a sustainable outcome. Having a budget which we stick to will, instead of making us fearful, give us a feeling of control and allow us to feel positive about the future.
If your financial planner has not asked you to do a budget, let alone update it annually, then you should question how they can give you the advice you need currently, let alone plan for your future retirement. At Client Care, we assist our clients in creating their personal budget in their current positions, as well as what it will look like in retirement. We use cashflow modelling to show what their future outcomes are and then help them understand the trade-offs they can make either now or in the future to make their personal plan work.
If you do not use budgeting, you simply cannot be in control of your financial life. Don’t know where to start? Give us a shout. It starts with the first step.
Dirk Groeneveld, Certified Financial Planner
t. 083 261 9287
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Disclaimer:
This article is for information purposes only and does not constitute financial advice in any way or form. It is important to consult a financial planner to receive financial advice before acting on any information contained herein. Client Care and PWM and its directors, officers, and employees shall not be responsible and disclaim all liability for any loss, damage (whether direct, indirect, special or consequential) and/or expense of any nature whatsoever, which may be suffered as a result of, or which may be attributable, directly or indirectly, to the use of, or reliance upon any information contained in this article.
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