A good budget is made to last throughout the years. Yes, you can budget in the short term to get through troubled times, but the best budgets will take you out of trouble and to your goals. Budgeting is essential in planning for your future.

There are ways you can make your budget easier to commit to. The number on thing to remember throughout the budgeting process is that a budget is not a fixed document. It has to be flexible, as your spending changes over time. It is a guideline, but detours do happen.

Start with a budget that fits your family’s situation and spending habits. The key is having money left over, not where you are spending money. Don’t follow someone’s percentages as to how much you should be spending on groceries or gasoline. Your budget must fit your family. It is necessary to accurately list your income and expenses. Don’t round things up or down. Don’t smudge on how much of your income goes to taxes. Don’t leave things out. Be honest, or it won’t work. Never budget for a future income, budget for right now. You need to include enough categories so that you know where your money is going. However, too many people go to extremes in details. You don’t need to necessarily track every single category, you can lump some together. For example, my family budget includes a free spending category. This can be anything from clothing (we don’t purchase a lot of clothing) to a night out on the town. You have to include things that don’t happen monthly, such as your auto insurance, homeowner’s insurance, property taxes and yearly leases. Make sure that you are putting these amounts in an account for when they come due. This will save your budget when you get the bills for yearly expenses. You won’t be left scrabling. This is just as important as having an emergency account for auto maintenance and other repairs. You need to regularly review your budget to determine that you have enough categories and are budgeting enough for each category. You should also look for ways to cut your spending in your categories. Some things you can consider a challenge. Aim to cut your grocery bill by $40 next month. Look for ways to save. They are there. Make sure that you track how much cash you are spending. Keep receipts if necessary — this is usually easier than writing things down as you spend them. If you aren’t good at tracking, give yourself an allowance of cash. This is all you have to spend. We do this as we are awful at tracking our spending. But we never overspend on our cash limit for the month. We know what can and can’t come out of our checking, so it protects our budget. In fact, most people respect cash more than checking, so they will actually be stingier with their cash reserves. Budget your savings as a bill that must be paid. I recommend having it automatically withdrawn from your checking each month. That way, there is no way to avoid paying your savings. It is already gone. You won’t spend it thinking you’ll put a little extra in next month. The most important bill you have to pay is your future. Have realistic goals. Budgeting isn’t about tracking money, it is about meeting financial goals. It allows you to save for your future, for your kids’ college, for vacations and other things you want to do in your life. Without these goals, there is no reason for a budget and it will fail. You need to see how you spend your money by looking at your budget. Most people are amazed at how much they are spending in various areas. You need to be able to look at your budget and see exactly what can or needs to be changed. You can always cut costs and save more. Challenge yourself. The top thing is keeping your eye on the goal and remaining positive. Your attitude will make your budget work. Don’t look at your budget as something holding you back. Look at it as a way to find money for your future. A budget can definitely make your life much easier. But you have to stick with it.

Business owners are not looking for financial advisors to give them the life they want by making a killing in the stock market; these people have been able to create the life they want by themselves. In the early 1990s, at the beginning of my financial planning career, I was very fortunate to meet one of Canada’s most successful businessmen. He was in his late 50s and had much more life experience than me. He shared that 99.9 per cent of the investment advisors he had met over the course of his career did not have the foggiest idea of how to make money nor did they understand what successful business people were looking for when they sought out professional advice.

He told me that when he took a risk he got paid for it. He could buy a piece of property for a marginal amount, get it rezoned for a shopping mall and then get franchises to sign letters of intent to lease for five years or more when the property was developed. Once this was done he would go off to the bank and borrow on the future revenue that would be generated from these highly profitable leases to develop his properties and create a residual income. He knew he could take his own money and make 100 times the amount with 1/10th the risk that any stock broker could offer him and he was right. Business owners are not looking for financial advisors to give them the life they want by making a killing in the stock market; these people have been able to create the life they want by themselves.

Successful business people want their financial advisors to show them ways to keep their wealth. In essence, successful people want their financial advisors to provide them with financial, tax, succession and estate planning holistic solutions. They don’t need their advisors to sell them products such as stocks, mutual funds and life insurance to achieve their financial success. The point is they are already successful. Business people are looking for financial professionals who are positioned in the role of wealth manager. Someone who can see and understand the affluent business owner’s big-picture needs by constructing customized strategies to achieve their specific goals of wealth preservation, avoidance of unnecessary tax burdens, creditor protection, wealth accumulation and wealth distribution to themselves, their family, estate and charities.

Successful business owners have an understanding that a financial asset is something that puts money in their pocket, with minimum labor. They understand that a business can buy a car, but a car cannot buy a business! Liabilities are things that take money “out of one’s pocket.” For example a home is a liability even though you own the property with no mortgage, you still have to pay property taxes, utilities, and maintenance.

There are numerous advantages available to those who own their own business, who take the risk and have the creativity and fortitude to do something on their own. These people are compensated for it. As an employee in Canada, one’s equation of earning an income goes like this:

you earn; you’re taxed; then you get to spend what is left over.
When one is a business owner and self-employed in Canada, our government allows you to adopt a much more favorable equation of earning an income:

you earn; you spend, you income split, and you defer bonuses; then you are taxed on what is left over!
Business owners are different from the rest of Canadians, if for no other reason the Income Tax Act favors people who work for themselves. The biggest expense we pay in a year is taxes. Reducing taxes is not only morally and ethically right, it is also smart. There are three easy rules that keep your money in your pocket in this country and not in the government’s:

1. Find the right business structure for your business to pay less tax and protect what you have.

2. Learn to make more money by using the tax strategies of the rich such implementing health & welfare trusts, individual pension plans, retirement compensation arrangements, holding companies, charitable donations and estate freezes.

3. Pay less tax legally and still sleep at night.

The basis of success with working with a Certified Financial Planner is to have a financial plan. A true financial plan is more than simply buying and selling investments, or collecting “assets” that bring in no cash and are thus more akin to liabilities. The way most people invest, they might as well be driving in a circle. A true financial plan is mechanical, automatic, and boring. It applies “The Total Financial Planning Process.”

Assess

Clarify your present situation by collecting and assess all relevant financial data, such as lists of assets and liabilities, tax returns, records of security transactions, insurance policies, will(s) and pension plan(s).

Prioritize

Decide what you want to achieve by identifying financial and personal goals and objectives. Work with your financial professional to help clarify your financial and personal values and attitudes. These may include selling your business, providing for children’s education, supporting elderly parents or relieving immediate financial pressures to help maintain a current lifestyle and provide for retirement. These considerations are important in determining your best financial planning strategy.

Recognize

Identify and recognize financial problems that can create barriers to reaching your financial goals.

Understand

Understand your choices, your financial professional should provide you with written recommendations and alternative solutions. The length of these recommendations will vary with the complexity of individual situations.

Action

Implement the right strategy to ensure that your goals and objectives are met. A financial plan is only helpful if the recommendations are put into action.

Review

To ensure that your goals are achieved it is very important to have periodic reviews with your Certified Financial Planner and other financial advisors to see if there should be revisions to your plan. Successful business people in this world look for and build networks of experts to help them achieve their life and financial dreams. The key to managing your financial future is to plan for it.

All highly successful people I have every work with had a very clearly defined, written life, career and financial plan. They believed implicitly and unshakably in their plan and were impervious to external circumstances. So they didn’t alter their plan every time the wind changed direction, and continued to work their plan steadfastly, no matter how long it took, until their plan inevitably succeeded.