Budgeting and Financial Planning

Distinctions between budgeting & financial planning.

The difference between budgeting and financial planning

The difference between budgeting and financial planning

Budgeting and financial planning are often used interchangeably in the speech of laypersons, when they are talking about the economic outlook of organizations. They are, however, very different processes, although the two are interrelated. One analogy is that of someone trying to maneuver the organization like a rowboat over a difficult current: "The energy you use to make the boat move is like the money you have to spend. You can row all day, but if you don't spend any time steering, you'll never arrive at your destination. Budgeting, like rowing, provides the resources...Financial planning, like steering, focuses our effort on our destination. Rowing without steering, or budgeting without a long-range strategic financial plan, will keep you moving -- but not necessarily in the right direction"...
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