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Five minutes to midnight

Ignoring the necessity of budget planning can turn your life into a russian roulette…

Very few of us take family budget as seriously as business budget. It’s not unusual for momentary plans and problems to ‘outshine’ the end goals. Short-term planning is usually emotionally colored. It is nobody’s fault – humans are just made this way: what happens today or tomorrow seems to be of greater importance. Plan and plan­ning rarely go hand in hand with family life. As a result, all recommendations on budget planning don’t go beyond the talking stage and practically never bear any fruit.

However, ignoring the necessity of budget planning can turn your life into a Russian roulette. Sooner or later, not only you but your whole family will be hit with the deplorable outcome of your light-minded attitude to the planning of your family budget. An important step on the way to stable family budget is the ability to do the summing up. What I mean is balancing your budget at the end of each calendar year. My goal is to give you the tool for balancing the budget that is good for today, tomor­row, and for ever.

So, let’s assume we are in the last day of December, five minutes to mid­night… Perfect time to sum up the past year. Let’s not change the tradition and start with numbers.

1. Begin by checking out your total accumulations by the middle of December of the current year and break them into different categories: cash in the bank accounts, invest­ments in real estate and cars, pen­sion plans, insurance plans, etc.

2. Compare the final number with that of the three preceding years.

3. Check out the total amount of your debt, also in different catego­ries, and compare it to the three preceding years.

4. Now put all the numbers into an Excel spreadsheet and do the visual analysis of all the changes. I will be happy to provide you such a spread­sheet in case you have difficulty with the format. Don’t be afraid to experiment.

5. Make long- and short-term plans. Long-term plans are for 10 years or longer, such as pension, mortgage, investment. Short-term plans are for no longer than 3-5 years and include purchase of a house or a car, investments in busi­ness, cost of your children’s educa­tion.

Decide when you want to retire and calculate the number of remaining ac­tive years. Once you have this number and see the dynamics of your accumu­lations and debt reduction, it’s easy to calculate what your financial situation will be at the time of your retirement. You, no doubt, realize that retirement means a dramatic reduction of income which inevitably will affect your life style. Most likely, you are not going to be happy with the numbers. Most of us are reluctant to accept less than what we are used to. However, once you know your deficit, you can plan the increase of accumulations and reduc­tion of debt. It’s obvious that solution of financial problems depends, first and foremost, on the changes in your income. That’s what you need to focus on. If you do this annual financial anal­ysis, you will be fully prepared to meet your retirement in a perfect shape.

Plans are not a guarantee of Victory. But their lack is a guarantee of Defeat. I am always ready to help you become victorious. Don’t hesitate to give me a call.

joseph RozenbergPlease call me for more information: 847-520-7030.
email: mockbajr@gmail.com
site: www.drfgroup.net