Budget

At the beginning of the month I always use to listen this word in home. My mother, who creates estimate of whole month, is called budget. Although we might not know it, we prepare a budget each time we estimate how much cash we will have left at the end of the month after paying our bills. In a business language

“A budget is a forecast of all cash sources and cash expenditures. It is organized in the same format as a financial statement, and most commonly covers a 12-month period. At the end of the year”

Need of a Budget

I always ask my mother why she was doing all these budgeting starting of the month. She often told me it is very important to know our basic needs and expenses. A budget can greatly enhance your chances of success by helping you estimate future needs and plan savings, spending and overall cash flow. She told me that you can arrange and put your money at needful things. In future if you need money for different work you can take it from home savings.

“A budget allows you to perceive problems before they occur and alter your plans to prevent those problems.”

How to Use a Budget

In household, budgets help you determine how much money you have and how you will use it and help you decide whether you have enough money to achieve your home needs and wants. 

A family budget will indicate

· The cash required for necessary things

· Total start-up costs

· Money involve in day to day work

· saving needed to support other activity at home

· Expected savings of month.

If your budget indicates that you need more money to expense than you can earn, adjust your plans by

· Reducing expenditures

· Expanding working hours to earn more money

· Lowering savings expectations

Every home should create a budget before investing money in new area of interest or other assets. To ensure your goals can be reached, first put all the numbers down on paper so you can adjust and rework them as many times as necessary. In this way we can say our mothers are fund managers at our home. They save us from unexpected loses in near future.