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Advantages & disadvantages of budgeting
Advantage and disadvantage of budgeting
Advantages & disadvantages of budgeting
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Answer: Budgeting and personal financial goal go hand in hand to assist you in being financially prosperous now and in future. However, they have key differences. Budgeting process helps you plan out you important expenses in the coming weeks and months but they do not help you plan for your financial goals and the funds needed for it in 5, 10, 20 years to come. Financial plans helps you in building a long-term goals which include insurance, estate planning, retirement, education, travel, taxes, etc. while budgeting deals with your day-to-day expenses and managing funds for it. With budgeting, you can figure out the extra amount you have left after your expenses that you can invest towards achieving your goal. Financial planning helps you keep …show more content…
Describe and explain two (2) advantages and two (2) disadvantages of using superannuation to purchase Term Life Insurance. Answer: life insurance purchased within the superannuation has its own pros and cons. Here are a few of them: Advantages: a) Buying superannuation funds in bulk can make the insurance cheaper. b) A basic level of cover is provided by these insurance without a medical exam. c) These insurance often provide income protection and total and permanent disability insurance (TPD). Disadvantage: a) The amount of the insurance cover may be not enough as per your requirement. b) Superannuation fund insurance does not cover trauma. c) Less money will be invested back into the fund, if the superannuation fund pays the premium to the insurance. This in turn will mean less amount of money available at retirement from your fund. 3) Distinguish between direct and indirect superannuation fees. In the longer term which fees are likely to have the most impact on the amount accumulated and what can the individual do to minimize this? Answer: The difference between the direct and indirect fees in superannuation are as
The Basics Of Personal Budgeting A budget is a powerful financial tool that we need to take advantage of so that our finances can be managed the right way. You get to plan your spending and keep track of spending habits. The number one key in having a great budgeting plan is keeping things in balance. This should be taught when it comes to personal budgeting basics Creating your first personal budget can be a challenge and scary for some. Only 40% of American households have a budget in place.
Introduction Budgets are an essential component of our lives, from our personal expenses, to our businesses or organizations, to the way our governments work. From a very early age, my mother tried to teach me the importance of planning and strategizing, included in what had to do with our finances. As I grew older, and especially as I became a student living on a modest stipend, I had to perfect the art of budgeting. The most difficult tasks for me were always having real expectations of the actual
Budgeting I know firsthand how important budgeting is, I own a business and being a small business owner, I have learned how to be efficient in my business. I also believe that budgeting is a must for any size business to succeed and become profitable. In fact, I am an income tax professional, and I have advised many of my clients in their business as well as, their personal finances when it comes to budgeting. Budgeting refers to the process of planning on expenditure and aids in determining the
somewhere, or to buy a new car, sometimes we just want to have money in case of an emergency. These are all things that can be done with starting a personal budget. By having a personal budget, you put yourself in control of your finances, are able to save money for emergencies and reach personal achievements like getting a new car. Having a personal budget puts you in control of your finances. If you prepare a budget properly you can see how much money you really have. Having a budget will let
Introduction Budgeting is an essential process for all businesses. By using the company’s current financial data as well as its historical data, a business should be able to forecast and plan a budget for the company’s future. A budget is defined as “a statement of monetary plans that is prepared in advance of a forthcoming period, usually one year” (Brookson 2000). This budget should align with the company’s strategic and operational plans and is the tactical implementation of the company’s
to produce and obtain those goods. Economics explains how people interact within markets to get what they want or accomplish certain goals. Since economics is a driving force of human interaction, studying it often reveals why people and governments behave in particular ways. Critical evaluation- Personal life: Economic on personal life play a very important role , without money we cannot service in the world ,to earn money we need to have good education. Money is
Reflecting on the pathway of my financial affairs reminded me of a quote by David Ramsey, “A budget is telling your money where to go instead of wondering where it went.” As young adults we have the proclivity not to consider our futures but concentrate on living in the present. Being put in better words by Charles Jaffe, “It’s not your salary that makes you rich, it’s your spending habits.” Without accurate knowledge, the effects of not budgeting comes with the responsibilities of debt; then comes
All financial decisions and activities of an individual, this could include budgeting, insurance, savings, investing, debt servicing, mortgages and more. Financial planning generally involves analyzing your current financial position and predicting short-term and long-term needs. Personal finance looks at how your money and future is managed. Often individuals will seek advice from financial planners, but the use of software or websites is also an option. For example personal finance would include
Literature Review: ‘Beyond Budgeting is the set of guiding principles that, if followed, will enable an organization to manage its performance and decentralize its decision making process without the need for traditional budgets. Its purpose is to enable the organization to meet the success factors of the information economy (e.g. being adaptive in unpredictable conditions).’ Quantitative plans are called budgets. Budgets are prepared to impose cost controls on the activities of an organization
Organization is a factor that businesses face when organizing resources to achieve operational goals. The organizational process creates an organizational structure, and defines how tasks are divided, resources are deployed, and departments are created. There are three common organizational structures and those structures are the horizontal structure, the departmentalization structure, and the vertical structure. The vertical structure is composed of work specialization, which allows employees to
Most individuals are not proficient at managing personal finances. Although, management an easy task, usually only for some people who have the experience with managing their finances. In contrast, others find it a daunting due to lack of knowledge. Because, the economy have transfigured drastically since the1980’s, and the cost of living, insurance rates, and interest rates on student loans have all increased along with health care having doubled, managing money well has become more difficult
or performing other calculations. This makes spreadsheets similar to database. However, spreadsheets are more efficient than databases in terms of processing numbers. This is the reason why spreadsheets are commonly used in scientific and financial sectors. For example, a spreadsheet can store Suttons Dealership Sales data, including discount information, VAT, Car Price, etc. A column that stores the car prices of several cars can easily be summed to produce the total value of all the cars
you have begun to save and have accumulated wealth for your future financial goals and you are living without the constant worry of debt or monthly budgeting. To actualize this visualization, you must establish our reasons for financial change and make a personal commitment to take required action. Establishing Your Reasons for Financial Change The first step in the process of becoming debt free is to understand what your personal motivation for change is. If you are not motivated to make changes
are many ways a person can manage their money such as by budgeting, saving, and using credit cards wisely. Budgeting What exactly is budgeting? A budget is a plan that helps It’s not easy starting, and actually following a budgeting plan but there are eight steps that will help you get started. Following these steps will help you in setting up your very own, personalized budget: “Step 1. Make a list of your values, Step 2. Set your goals, Step 3. Determine your income, Step 4. Determine your expenses
Financial Management has a lot to do with the duties of the financial manager working in a business. Their function can come in two approaches; one being an executive finance function which involved mainly decisions, the second is the routine finance function. These could be such things as supervision of cash receipts, safeguarding of cash balances, and custody of valuable documents, mechanical details of financing, record, reporting to top management and supervising fixed and current assets. For