Limitaions Of Budget

Management Of Family Resources

Lesson 36 : Budgeting

Limitations Of Budget

Some of the important limitations of budget, as given by premavathy et.al are:

• A budget cannot make an inadequate income adequate. It can, however, help to avoid the use of limited funds for items which the family itself agrees as non essentials.
• It cannot give an individual the ability to select the products wisely in the market. A budget only directs the expenditure on a particular item.
• Budget making initially is a very tedious process to work out. Only through frequent budgeting practices, one can master the art of budgeting.
• Through budgeting, usually the family with very limited funds surrender all pleasures until the other needs are met, i.e. allowance for recreation is cut off during shortage of income thus making its members to have a feeling of discontentment. Thus budgeting may lead to discontentment to the members of a family with limited income.