What do financial plans usually include regarding expenses?

Financial plans typically include a comprehensive consideration of potential income fluctuations. This aspect is crucial because it allows individuals or businesses to anticipate changes in their financial situation, which can significantly impact their overall financial health. Planning for income fluctuations means acknowledging that income can vary due to various factors such as job changes, economic conditions, or seasonal business cycles. By incorporating this into a financial plan, one can establish a more resilient budget that accounts for both leaner and more prosperous times.

In contrast, while estimates for medical emergencies and tracking of monthly expenses are essential components of sound financial management, they do not encompass the broader strategy required to navigate changes in income over time. Categorizing expenses by color might be a method to visualize data but doesn't fundamentally contribute to creating an effective financial plan. Therefore, recognizing and planning for potential income changes is a foundational element of responsible financial planning, ensuring that one can adapt their spending and savings strategies accordingly.