Budget is the most common device for the proper (Planned) use of money. It is a way for deciding the future expenditures taking into account the future income. The major advantage of making a budget is that it enables a family to take an overview of its money. Decisions to include or exclude items are made considering them in relation to the familygoals and income.
Budgeting is multitrack thinking because at the same time the family must establish balance among.
Expenditure for current consumption Ex: food, clothing etc.
Current provision for future consumption such as setting aside money for children’s education.
General plans for future expenditures including some which have been postponed or new ones which need to be anticipated.
The budgeting is also significant for the family life because it serves as an approach to other problems. Budgeting is always a dynamic process. No budget will be so difficult or time consuming as the first one, regardless of the stage of the family. Often changes in budgeting will be needed because of changes beyond the control of the family.
Budgeting, like all management, is dynamic. Its value and the need for it remain constant through the famil’s life time. Changing situations require new answers to old or continuing problems as well as to new problems. Probably no budget will be so difficult as the first one, regardless of where the family is in the life cycle when the need for such planning is recognized. Succeeding plans will be easier because principles of planning are same and some information will carry over.
The budget planned should be realistic, flexible and workable. Then only the goals of the family can be met and maximum satisfaction can be achieved.
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