Difference between Budgeting vs. Financial Planning

[Suba]

Budgeting is a target or estimate of income and expenses for a certain time period, for example a month, quarter or year. Often for both personal and business purposes, budgeting is also used as a tool for controlling, planning, allocating funds. How to prepare effective budgeting must start with forecasting using historical financial data. After the end of the budgeting period, we will also evaluate or analyze whether it is profitable or unprofitable. what is the ratio with actual data, etc. Meanwhile, financial planning is a strategy and implementation that must be implemented to achieve a financial goal, such as how to save for emergency funds, pay debts, retire funds, buy a car/house, etc. Financial plans require in-depth evaluation and analysis of income and expenses, risk profiles and investments. Strategic financial planning is a long-term plan, while operational planning is only for one period or short term. If you have a different opinion, feel free to comment below.

 

[Augusta]

With a financial plan, you typically track your progress on a quarterly or semi-annual basis. With a budget, you record your income and expenses on a weekly or monthly basis.

 

[eLdavis]

Personally i think budgeting is also part of financial planning. Budgeting has to do with allocating a specific amount for a particular thing.