Management Of Family Resources

Lesson 38 : Importance Of Budgeting

Controlling The Use Of Income

Similar to the management of other resources, plans are not likely to be carried out successfully unless some control is exercised. This is particularly true with a complex plan such as a budget. Control is as important as the planning. How much one achieves after the successful completion of a budget depends on how much of it is followed. Thus it is very important that proper methods of control are devised.

The process of control in financial management is usually comprised of two areas – firstly checking to see how well the plan is progressing, and secondly, adjusting the plan where necessary.

Checking is of great importance as it helps to keep in mind the decisions which were made in the planning stage and gives the assurance of knowing whether or not adjustments are needed. There are mainly two types of checks which are followed by many families. These are:

1. Mental and mechanical checking
2. Record keeping.