Financial health: Why you need to keep comparing your actuals to your budget
If you read our previous blog post on the importance of having a budget, then you’ve probably set up a budget for yourself.
Great. Now what?
Well, it’s time to add the final piece to the cash flow puzzle: tracking your actual numbers, and seeing how they compare to those in your budget.
The results may be a pleasant surprise or a rude awakening. But no matter how they compare, you need to heed these two pieces of advice.
Don’t accept failure
If you‘ve taken the time to put together your budget using our tips, your actual numbers should hit it pretty closely. But if they don’t, you need to either redo your budget or make some drastic decisions to cut (or at least delay) your spending.
Whatever the outcome, make sure you keep track of how things are going by regularly comparing your budget to your actual figures. And if you find they don’t match, do something about it straight away.
Have confidence in your numbers
As you probably know, we develop budgets for our clients to help them stay on track with their actuals. It gives them confidence knowing how they’re tracking, and helps them make effective financial decisions because they’re dealing with real figures.
What you might not know is we do the same thing in our own business, and for the same reasons.
So don’t be afraid of the actual numbers. Have confidence in them, and use them to improve your financial situation.
Knowledge is power
Comparing your actual figures to what you budgeted for isn’t always a pleasant experience. But don’t stick your head in the sand if they’re not what you expected. Do something about them instead.
Even if the figures do match your budget, you need to keep it up. Make sure you’re meeting your budget figures not just once, but regularly.
Because whatever your numbers are like, they’re telling you how you’re really doing. And they’re the key to making smart decisions and improving your financial situation.