Much of the confusion about budgeting comes from failure to separate 2 very important statements.

1. Personal Cash Flow Statement
2. The Budget

The personal cash flow statement is where you track all of your expenses. This is the document that teaches you where your money is coming and going. It also tells you what your cash flow is.

You use the information from this worksheet to set spending goals. That is all a budget is... spending goals for where you want your money to go.

Again, the personal cash flow statement tells you what's happened with your money. A budget allows you to set goals for what you want to happen with your money in the future.

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