Lesson 36 : Budgeting

Realistic Budget


For a budget to be workable, it must include some practice method to achieve the goals that have been identified for its time period. A workable budget is complete. It does not omit items that are normal for the spending pattern of the group. Incidentals such as stationary, postage, cosmetics, car repair, recreations, gifts are some times forgotten. If such items are considered as miscellaneous expenditures in budget, the category must be adequate enough to include them.

Gaining maximum satisfaction from the budget requires accurate estimates of the costs of living. If the income pattern is irregular and income is lower than the anticipated amount, the flexible side of the budget must be trimmed, or savings may be used. Records of past expenditures are helpful to establish accurate estimates of flexible expenditures.

Workable budgets are seldom achieved with one attempt. Reviewing the plan to assure that it is directed toward achievement of identified goals. Meets the needs of all members to use it. Assures solvency and allows funds for emergencies is a necessary process in developing workable financial plans. Using a budget for a period of several months will further test its effectiveness.

Analyzing a budget with goals clearly in mind and questioning each item’s relationship to the goals may help eliminate the least productive expenditures.

A budget is not meant to frustrate wants; its purpose is to provide a plan for gaining wants that are important. If the budget does not balance-income is insufficient to include fixed obligations, normal flexible living expenses, savings, and high-priority goals- a study of the plan may indicate the areas that provide least satisfaction.

Last modified: Thursday, 22 March 2012, 9:17 AM