Do I Really Need a Budget?
Excerpted from the bestselling book, It's More Than Money — It's Your Life!
By Candace Bahr, CEA, CDFA and Ginita Wall, CPA, CFP
Do you need a budget, or can you do just fine without one? Use this handy quiz to find out.
1. | When you get a raise, you typically: |
| Treat yourself to dinner out or something you've had your eye on. and then allocate the rest to savings. |
| Go on a shopping spree. |
| Promise yourself again that you will draw up a budget. |
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2. | You're at the mall. You find a beautiful, handmade sweater-at handmade sweater prices. You know that you could really live without it if you tried. What do you do? |
| Keep your wallet in your purse-you know you don't really need it. |
| Think about buying it, but decide against the purchase because there's something else you would prefer.. |
| Buy it immediately. Money exists to be enjoyed. |
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3. | At the end of the month: |
| There is always more month than money. |
| You look forward to adding up your retirement plan contributions. |
| You manage to pay all of your bills, save a bit, and not end up in the red. |
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4. | When planning your annual vacation, you: |
| Use the money set aside in your budget for travel. |
| Pay for your dream vacation with credit cards-you only live once, right? |
| Never take vacations-you just can't seem to spare the money. |
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5. | If your financial habits were a song, the title would be: |
| "The Low-Down, No-Dough Blues" |
| "We Can Make It Through" |
| "I'm Savin' It All Up For You, Babe" |
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6. | The grapevine at work is full of news about layoffs. Sure enough, you're next. What do you do? |
| Pat yourself on the back for accumulating an emergency fund. |
| Try to arrange for higher credit limits and a home equity loan. |
| Plan the vacation for which you haven't had time. |
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7. | You know: |
| The approximate amount you have in the bank and how much you have charged this month. |
| The balance of your accounts down to the penny. |
| The exact starting date of the best sales in town.. |
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8. | When your favorite store announces a going-out-of-business sale, you: |
| Get your plastic ready-you're going to shop until you drop. |
| Buy your dream stuff; you'll skip your vacation this year. |
| Go to the sale with your credit cards and come out with a bit more than you expected, but you'll pay it off within a month or two. |
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9. | Credit cards are: |
| To be used for emergencies only. |
| To be paid off every month. |
| To be used to the max. |
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10. | Which best describes your budgeting style? |
| You've noticed a pattern of emotional spending-when you're happy, sad, or bored (or any other excuses you can think of). |
| You spend according to your financial plan, keeping your long-term savings goals in mind. |
| You spend in cycles-running up credit card debt and then paying it down.. |
http://www.wife.org/budgetquiz.htm
Budgeting Quiz
1. The budgeting process starts with monitoring current spending.
True
False
2. Most short-term goals are based on activities over the next two or three years.
True
False
3. A common long-term goal may involve saving for college for parents of a new-born child.
True
False
4. Rent is considered a fixed expense.
True
False
5. Flexible expenses stay about the same each month.
True
False
6. The final phase of the budgeting process is to:
set personal and financial goals.
compare your budget to what you have actually spent.
review financial progress.
monitor current spending patterns.
7. An example of a long-term goal would be:
an annual vacation.
saving for retirement
buying a used car.
completing college within the next six months.
8. A clearly written financial goal would be:
To save money for college for the next five years
To invest in an international mutual fund for retirement
To establish an emergency fund of $4,000 in 18 months
To pay off credit card bills this year
9. An example of a fixed expense is:
clothing.
auto insurance.
an electric bill.
educational expenses.
10. What is commonly considered a flexible expense?
rent
a mortgage payment
home insurance
entertainment
BUDGETING QUIZ ANSWERS
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1. What does Budgeting mean?
2. Disposable Income is calculated by...
3. You earn £1000 a month. You spend £600 on rent, £150 on food and £60 on utilities. How much do you have left?
4. Which of the following are essential expenses. Tick each one you think is correct
Food
Rent
Socializing
Mobile Phone
5. Wages, Tax Credits and Benefits are Income or Expenditure?
6. To convert weekly figures to monthly you....
http://www.learnvest.com/2012/02/quiz-are-your-food-choices-ruining-your-budget/
http://www.economywatch.com/budget/types/
http://www.economywatch.com/budget/types/
Budget
Every business needs a budget that allocates income and outgoings in well-defined categories. The best budget system is based on the history of the business, i.e. a detailed listing of where money was earned and spent in the past; but, essentially, what a manager is trying to do is pin down (on at least a quarterly basis) his yearly receivables, and from whom and where, and his yearly expenditures. Then, against that budget, the manager should track business operations to see whether budget projections are turning out to be reality. It’s important for a manager to account for every dollar that comes into the business and every dollar that goes out. And, in a pinch, he needs to know where the business is, against budget, right now.
Budget is a financial statement that coins down the expected revenue and expenditure of a particular fiscal year. There are different types of Budget
Different Types of Budgets are given below: Government Budgets: are the summarized versions of the anticipated revenues and expenses of a government. Government Budgets focus on the distribution of wealth for economic as well as political and social purposes. 1. Materials and Utilities Budget: This budget also known as operations budget includes budgeting for raw material required for production, spare parts for maintenance, labour time, machine time, energy consumption etc. The labour time and machine time is usually related to what a unit of time is budgeted to yield. It is the output per unit of time. 2. Control of Liquidity: This involves cash flow and is very important in controlling cash and meeting current financial obligations. This budget forecasts cash receipts and outlays on a set time basis and is necessary to control the income and expenses, so that 3. Revenue and Expense Budgets: The revenue budgets should show anticipated sales by product or by geographical territory or department etc. The expense budgets should cover all necessary and relevant areas such as rent, utilities, supplies, security etc. 4. Capital Expenditure Budgets: These budgets plan for long-term investments and include expenditure for new plant and equipment, major installations replacement of existing equipment, building etc. Capital budgeting is a part of long-range planning and must be broken into well defined phases of the programme, known as milestones, each phase being budgeted for cost, time and success in a self contained way. 5. Balance-sheet Budget: It is a composite budget and reflects anticipated assets, liabilities and owner's equity or net worth at the end of a given period in the future. It provides forecast of the anticipated financial status of the company at a future date. 6. Flexible Budget: Flexible or variable budget reflects and combats the changes in expenditure as a result of changes in volume of production and revenues. These expenditures are primarily variable costs since the fixed costs are not generally affected by changes in revenues. The basic idea of flexible budget is to establish a relationship of changes in variable cost as affected by changes in revenues due to changes in sales. http://ru.scribd.com/doc/26306332/Types-of-Budget Businesses use budgets to plan for future activities and to set various goals and objectives within the company. They help the organization set specific expectations which aid in evaluating performance throughout the company. Budgeting helps organizations implement specific strategies to meet goals and objectives. It is important to note that a budget is an estimate and will often need to be adjusted over time. A Budget is a financial statement that coins down the expected revenue and expenditure of a particular fiscal year. In order to properly plan and set goals, several different budgets must be created. Types Of Budget Sales Budget Sales budget is a functional budget. The product wise as well as regional breakup of sales estimates are incorporated in the sales budget. The sales budget begins with the previous year actual and incorporates the likely changes Production Budget The production budget is prepared based on the sales estimate incorporated in the sales budget. The adjustments with respect to the opening and closing stock positions that are policy decisions of the business are then made to prepare the production budget. Purchase Budget The purchase budget is another functional budget that estimates the purchase requirement of materials utilized in the production process. The purchase budget is based on the production budget and the standard material consumption requirement for the production estimates. Expenditure Budgets Expenditure budgets may be drafted as fixed / flexible budgets. A fixed budget is one which is prepared keeping in mind one level of activity. It is defined as one which is designed to remain unchanged irrespective of the level of activity attained. In contrast, flexible budget is one which is designed to change in relation to the level of activity attained. Flexible budgets are prepared where the nature of business is such that it is difficult to predict the demand/sale of goods. Cash Budget A cash budget consolidates all the cash inflows and outflows for the business. The cash budget is also a functional budget. The cash budget helps the business to plan the project purchases as well as to provide for the loan requirements. The cash budgets also help in defining the repayment plans for short and long term loans of the business. The cash budget is based upon the business policy of holding a certain amount as cash. This is the desired opening cash balance for the business. Accordingly, the cash budget forecasts the loan requirements or short term investments that are to be made with excess cash at any specific time. Master Budget The overall or master budget summarizes the other functional budgets. Consolidating the functional budgets, an income and expenditure budget and budgeted balance sheet are prepared. The master budget is usually a one-year budget expressing the expected asset position and capital and liability positions for the projected year. Flexible Budget: Flexible or variable budget reflects and combats the changes in expenditure as a result of changes in volume of production and revenues. These expenditures are primarily variable costs since the fixed costs are not generally affected by changes in revenues. The basic idea of flexible budget is to establish a relationship of changes in variable cost as affected by changes in revenues due to changes in sales.
there is no shortage of cash to pay bills and also there is no excessive unused cash which may be unproductive.
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| A budget is a financial document used to project future income and expenses. | | | 3 Etymological survey of the Eng lexicon |
