This blog will cover Part 2 of budgeting, examining your budget from a visionary standpoint and creating goals and benchmarks that you can accomplish by operating within a budget.
My primary vocation is corporate finance. I have previously mentioned that my career started as an analyst. I recently set out to become a chief financial officer, or CFO, of a multi-million dollar corporation. My primary function is to look back at what has happened and provide financial statements based on those historicals. I then focus on building models based on where the company is headed and what they want to accomplish. I create a plan for the company to successfully move in that direction and figure out what decisions need to be made to get things done.
By using this strategic visionary approach to look at the future, I can focus on how to grow the business, consider taxation, build performers and budgets, and so on so that I am aligning the vision of the company with those specific goals and benchmarks that we need to hit in order to get there. This is why I focus so much on the vision.
Building a vision for your life requires not just analyzing what happened but planning for what you want to happen.
Like I mentioned above, one of my big goals was to become a CFO, but what I didn\’t realize is that I didn\’t set my sights high enough. I had a dream. I had a plan to accomplish that dream, but it ended up happening a lot sooner than I was initially anticipating. When I was 27, I stepped into a role where I had to look at the entire organization from that strategic standpoint. While holding that position, I had about 35 departmental budgets that I had to build and develop with department heads. I also had to deploy those budgets, track them, and report them to the CEO and the board of directors. Soon after becoming the CFO, my position expanded even further, and I moved into a place where I was overseeing 11 departments. I took on an art operations arm where I was managing around 55 employees… and it stretched me—a lot.
It was one of those aspects where my education, my experience, was focused on finance, but I love the operation side. And so I think it was an easy shoe in per se, but it caused me to grow up fast. It caused me to experience challenges that I\’ve never faced before. And with that, that\’s a whole nother story to jump into, but really the context of why this is important, is this is part of my journey, and helping an organization\’s build out the vision and back that out to strategic goals and benchmarks. And that\’s exactly what I\’m doing today with you. So having these reoccurring budget meetings with these 35 departments, I found a reoccurring theme that was helpful in applying to the personal finance aspects. And what that was, was that people on a reoccurring basis would be thankful that they had parameters, that they had something to operate within, because they knew what the target was.
And I believe that that is why I\’m bringing this into this episode today, is for you to be encouraged that there\’s freedom within parameters, and those parameters that I put in place for those budgets and those departments, actually allowed us to accomplish so much more as an organization, and allowed us to take on some big organizational goals, whether it was paying off debt, or it was expansion, or it was being able to do renovations and so on and so forth. But that was all made possible because we were actually planning, because we were actually working to build a strategic plan based on what we actually wanted to accomplish.
So Eleanor Roosevelt once said, \”It takes as much energy to wish as it does to plan.\” So what does that mean? So what does that mean in the scope of your personal finances?
It means that you can wish all you want, you can think about all the things you do want to accomplish, but if you don\’t actually sit down and spend that time more effectively by building out that plan, those wishes will fall on deaf ears per se, in the sense of those wishes will not be received, they will not be acted upon, and they will not be built out so that you are actually moving towards that goal. So for many of us, we probably wish that we were better with our finances, better at managing our finances, better at growing our incomes, and becoming financially independent. But without a plan that wish won\’t go anywhere. So I believe you can\’t just win it with money. It\’s got to be something that\’s intentional. It\’s got to be something that you are watchful of. And it\’s something that if you have goals you want to accomplish, you can\’t just set those goals and forget about them, you actually have to be active in the process.
So you\’ve probably heard the saying that if you fail to plan, you plan to fail. And I recently heard a statistic from reading a book by Chris Hogan, and he talked about how 35% of people who are of the age of 65 or older rely solely on social security for their needs. And I believe this is a direct correlation of not planning to win with money, not building a plan to succeed with managing your personal finances. So this was a sad reality to me because at a time when you should be building your legacy and spending time with grandkids, and traveling, and maybe hitting some of those bucket list items, there\’s more than a third of the population of people in that age bracket who are dependent upon social security, dependent upon that paycheck as their sole income source. And I believe that, that\’s unacceptable, and I believe that\’s why I want to help you build margin today so that you are building out a plan to ensure that doesn\’t happen.
So building out a plan to spend is completely unique to you.
You can\’t just go out and copy your neighbor as that\’s a temporary fix, because what their wants and needs are, are going to be completely different from the needs of you, your spouse, and maybe even your family. So we have so many personal finance personalities, or authors, today who are advising people to ditch the budget, ditch that archaic approach to managing your finances. But what I find in this is that it\’s not about ditching that plan to spend, what it is, is building that plan to spend so that it works for you, so that it works for your lifestyle, and it works for what you want to accomplish.
And I know that many of these personalities focus in on that budget per se, being of a scarcity mindset. And if you build the budget in your mind won\’t expand beyond the needs of that specific budget. So I understand that to some degree, but I would just say that, that\’s why it\’s so important that you apply your vision to your planned spend. Building your plan to spend in order to facilitate the goals, aspirations, and hitting those benchmarks of that vision. So the purpose of building a plan to spend is to tell your money where to go. That\’s literally what it comes down to. And so my call to action today is to sit down and look at your personal finances from an objective perspective, look at your personal finances from that perspective of how am I actually doing, and as we go further into this series, as we go into these episodes, I will be showing you how to actually build a plan to spend that works for you.
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