Budgets: Solving problems in advance

- [Instructor] All right, let's go back to the beginning. It's the end of September, and we're doing a cash budget for the next four months. We computed that the budget and amount of cash at the end of October was $14,000. So we're planning to start November with $14,000. We expect to collect another $10,000 in November, which will give us $24,000, but we expect to spend $60,000 in November. So it looks like we're going to come up $36,000 short in November. We're going to have to borrow $36,000 in November just to have enough cash to cover our forecast of payments. That's our budget, and we made that budget in advance at the end of September. Now, November comes along. Let's say it's the middle of November, and now we see that we need $36,000. Well, there are two ways to live life, business life and life in general. One way is to carefully plan out a budget like we got here. If we've got a careful budget, we already knew…