Budgets - how does the community want to use them?

Mike or Penny Novack mpnovack at mtdata.com
Tue Dec 29 11:13:33 EST 2015

On 12/28/2015 11:44 PM, Matt Graham wrote:
> Hi Michael, just a few questions with regard to your comments. I don’t 
> pretend to be an expert, so apologies if my questions are silly.
> >I agree the "something new" is what is really needed, not a 
> replacement. The issue is NOT really "business" vs "personal" but 
> "standard bookkeeping" vs things that are useful for individuals who 
> require
> something more basic.
> I concur (I think). Businesses tend to use what you call ‘standard 
> bookkeeping’, whilst this is not usually what individuals need/want.

No, you didn't understand what I wrote describing a four way matrix.

Not all of us individuals are constrained by our budgets. For some of us 
the budget is just a plan, advisory in nature. We might want the 
information how well we were following our plan (or not). So we would 
tend to use "standard". You are using the term "individuals" to mean 
just the many individuals who live close to the edge. Please note that 
that is NOT synonymous with poor vs rich. Plenty of well off people 
choose to spend to the hilt and so don't have a large reserve. Similarly 
there are people of quite modest means who choose to live very simply 
and so do have 3-6 months expenses sitting in the bank and possible many 
year's expenses in longer term assets.

Then there are entities (might not be "businesses") that ARE 
constrained. Maybe they have enough "money in the bank" but not LEGAL 
for the treasurer to cut a check for more than left in the budget.

It's not an individual vs entity thing.


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