Management Of Family Resources

Lesson 36 : Budgeting

Realistic Budget

The financial plans or Budgets are usually related to a particular standard of living. But a realistic budget is one which reduces probability of oversight of potential expenses, reconciles expenditures with plans for spending and compares the proportion of expenditure with priorities in goal attainment. A realistic budget should include the following categories.

1. Long range goals and possible emergencies
2. Repayment of due bills, debt and notes.
3. Commitments-both regular(as mortgage payments) and irregular(such as taxes)
4. Current living expenses such as food, clothing, allowances and transportation.
5. Miscellaneous, over looked items, unexpected expenses and extra spending.
6. Satisfaction of near future goals.

Since the budget or the financial plan are personal, there no one ‘right’ way or system of making the budget or planning the expenditures. In realistic budget some methods of reducing expenditures to a manageable list are essential.

This include the following:

• Flexibility
• Workability