Budgeting - Let's decide what we want!

[Andrew L. Gould]

On Monday 01 September 2003 11:36 am, Matthew Vanecek wrote:
> On Mon, 2003-09-01 at 11:15, Andrew L. Gould wrote:
> > On Monday 01 September 2003 10:01 am, Matthew Vanecek wrote:
> > I still think we're talking about 2 different tasks, which could be
> > handled in separate "modules".  (I mentioned this in a separate
> > sub-thread of this email topic.)  Currently, I earmark funds by removing
> > funds from my checkbook and allocating them to specific purposes in a
> > spreadsheet.  (I'm still planning the conversion to Gnucash.)  This is
> > similar to the cash management described above and to encumberance
> > accounting used in governmental accounting (yuk!). The amount left in my
> > checkbook is like petty cash, which is used for food, fun, etc.  This
> > method affects my day-to-day, week-to-week activities.  This may be all
> > that's necessary for personal financial management; but a small business
> > should also use a separate budget process that is more strategic in
> > nature.  A budget is something you would put in a Business Plan.
> >
> > Andrew
>
> A budget is not only for a business plan, but also for ongoing
> operations.  From corporate to SOHO, you have to know what you need to
> spend money on, and how much income you are projected to have.

I agree with you here; but there are multiple levels of budgetary control.  
What I'm trying to say is that accomplishing all levels of that control (Cash 
Management and Strategic Budgeting for example) in one process is going to be 
difficult.  It's going to be difficult to get a concensus of what it should 
look like; and it's going to be difficult to develop.  Separating them may be 
the best way of meeting everybody's needs.

>
> I'm definitely not opposed to having a mix of functionality.  I
> personally try to use a mix of business and personal financial
> management to keep things in line, and a budget process would be most
> handy.  But if you can design a way to have your above allocation
> implemented as well, please do so.  I'm not saying it wouldn't be
  ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
I wouldn't wish my current method on anyone.  I was using it as an example; 
not as a suggestion.  It's worked for over 9 years now; but after 9 years, 
I'm looking for something better.  Alright, I admit it -- it's a midlife 
crisis thing:  I'm turning 40 soon; and I'm looking for something new and 
exciting!  (My wife said a motorcycle was out of the question, but that a new 
accounting system would be okay.)

> useful--just that it's not how I would do it.  Barring catastrophe, I
> know the minimum amount of money I'll be receiving over the next 12
> months and can plan accordingly.  Even when I was struggling through
> school, and before, I had a decent idea of what to expect. So I could
> plan accordingly.  If you don't know what you're getting until you get
> it, life in general becomes a bit more different (and yes, I've been
> there, too. :( ).  Remember, however, that there are still many
> constants (e.g., rent, phone, cable, car insurance, etc.) that
> can/should be budgeted for.
>
> Life has taught me (rather quickly) that planning for the future sure
> makes it easier to handle...

Could you teach my stepkids this lesson?

Best regards,

Andrew Gould