What is a budget:
‘It is an estimate of income and
expenditure for a set period of time.’
‘an annual or other regular estimate of
national revenue and expenditure put forward by the government, often including
details of changes in taxation.’
‘the amount of money needed or
available for a purpose.’
‘a quantity of material, typically
that which is written or printed.
Now we have budget app on phones,
we could use the whole school method of writing out how much you want to spend
in a day and then you carry our daily reconciliation and keep the excess while
you deduct the shortfall against the next day budget.
Budgeting is simply balancing your
expenses with your income. If they don't balance and you spend
more than you make, you will have a
problem. Many people don't realize that they spend more
than they earn and slowly sink
deeper into debt every year.
Budgeting is the process of
creating a plan to spend your money. This spending plan is called a budget.
Creating this spending plan allows you to determine in advance whether you will
have enough money to do the things you need to do or would like to do.
In a personal or family budget all
sources of income (inflows) are identified and expenses (outflows) are planned
with the intent of matching outflows to inflows (making ends meet). In consumer
theory, the equation restricting an individual or household to spend no more
than its total resources is often called the budget constraint.
an amount of money available for
spending that is based on a plan for how it will be spent
What is a budget?
A budget is a plan expressed in
dollar amounts that acts as a road map to carry out an organization's
objectives, strategies and assumptions.
A company might have a master
budget or profit plan for the upcoming year. The master budget will include a
projected income statement and balance sheet. Within the master budget will be
operating budgets such as a sales budget, production budget, marketing budget,
administrative budget, and budgets for departments. In addition there will be a
cash budget and a capital expenditures budget.
It is common that the budgets
prepared for the next accounting year will be detailed by quarter and/or by
month. It is also typical that the annual budget will not be changed once the
actual year begins. Good managers realize that a budget is a guide and that it
cannot be so rigid that it prevents timely action when needed. In rare
circumstances the annual budget might be revised, but only when the business
environment has radically changed.
: a plan used to decide the amount
of money that can be spent and how it will be spent
: an official statement from a
government about how much it plans to spend during a particular period of time
and how it will pay for the expenses
Elements of a personal or family
budget usually include, fixed expenses, monthly payments, insurance,
entertainment, and savings.
A budget (derived from old French
word bougette, purse) is a quantified financial plan for a forthcoming
accounting period
Type
of budget
There is fixed budget
There is floating budget
What
affects a budget
Our spending culture
Our past spending
Our anticipated income and
expenditure
Benefits
of a budget
It will help you identify wasteful
expenditures,
It will help you to adapt quickly
as your financial situation changes, and
It will help you to achieve your
financial goals.
Since budgeting allows you to
create a spending plan for your money, it ensures that you will always have
enough money for the things you need and the things that are important to you.
Following a budget or spending plan will also keep you out of debt or help you
work your way out of debt if you are currently in debt.
REFERENCES
http://www.merriam-webster.com/dictionary/budget
http://www.mymoneycoach.ca/budgeting/what-is-a-budget-planning-forecasting
Sullivan, Arthur; Steven M.
Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New
Jersey 07458: Pearson Prentice Hall. p. 502. ISBN 0-13-063085-3.
http://www.accountingcoach.com/blog/what-is-a-budget
http://www.accountingcoach.com/blog/what-is-a-budget