Your budget should provide for business expenses and meeting longer-term financial goals, including saving for a child's education or your retirement, plus life insurance and other protection. You should also have a cash reserve of at least three months' income. By breaking long-term financial targets into short-term objectives, you can allocate a percentage of your monthly income to these goals over time.

Your personal budget gives you a basis for planning your work. It's the only way to establish a realistic idea of the production you need to make or surpass your goals each year.