ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Budgeting is a fundamental financial planning practice and, without a budget, it is hard to manage other aspects of personal finance including credit, insurance, saving, investing, and achieving goals such as a new car or a comfortable retirement.

Detailed explanation-2: -Such a budget helps you focus on setting aside money for growing your business, not merely surviving. This focus makes your decisions wiser, because you not only watch your current bottom line, you plan to grow your income for your future bottom line.

Detailed explanation-3: -Capital budgeting is important because it creates accountability and measurability. Any business that seeks to invest its resources in a project without understanding the risks and returns involved would be held as irresponsible by its owners or shareholders.

Detailed explanation-4: -A budget is a tool to track when and how you earn or spend money. Creating a budget is an important pillar of your overall success and security. It allows you to oversee and better understand whether your business has enough revenue (incoming money) to pay its expenses.