Financial issues are a sore spot for a lot of folks, and many of them often have trouble in planning out their finances and properly managing a budget. You might not even know there’s a difference between the two, but in fact there is:
A budget is simply something that people can use that lets them break down each of their expenses into categories over a certain time period (like weekly, monthly, or yearly). It is a guideline to follow in order to help with spending.
Each individual expense is placed into the budget and then added together for the total. This is then subtracted against the total amount of income made during the same time period. What results is the amount of money that can be saved during that period. To save more money, for example, expenditures can be changed or dropped from the budget altogether (if possible).
A financial plan is a tool that people use to help them achieve their long-term financial goals. Since it breaks down expenditures as well, it is similar to a budget in this manner. However, a financial plan is much more focused on the end goal(s) and is oriented toward achieving them.
As an example, if you want to save a certain amount of money in order to retire, a financial plan would be the outline you would use in order to reach that goal. While indeed similar to budgets, financial plans differ in that they are focused more on income and assets—things like bank accounts, pensions, home equity, etc. A financial plan can also provide an estimate for how much money can be made with stocks, bonds, mutual funds, 401Ks, and the like.
If you or someone you love needs assistance with Elder Care law issues, call 856-281-3131. Let us help ease your stress and give you a plan.