Budgeting for the budget

What is a budget and why do we do it? A budget is an essential planning tool for estimating your business or personal future income and expenses. A budget can be used to set goals and priorities and ultimately determine what you can and can’t do from a financial position. What it doesn’t do, however, is produce itself—however much we wish it did!

But how do you budget for a budget? Or, in other words, how do you ultimately decide what to prioritize when making a budget? It’s simple really when you understand the components that support your budgetary plan.

A budgetary plan starts with goal setting, which trickles into an action plan that should (hopefully) produce far more income than expense. Much the same as our own personal finances, order and planning should be the foundation of the budgeting process. So, where do you start?

Formulating the plan

Your first order of business is to look at your financial history, understand it, and become intimate with the ebbs and flows of your previous activity. What did your past budgets look like? Were they effective? Did they help your credit union achieve its goals?

 

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