ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It establishes a legal contract between you and a potential client.
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It helps guide you through purchasing a home.
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It creates a step-by-step plan to making profitable financial investments.
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It is a plan for spending and saving money.
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Detailed explanation-1: -Since budgeting helps in establishing a spending plan for the available funds, it ensures that the spending can be planned and contained such that there is enough money for most of the things that you would need. Following a budget can also keep you away from debt or help you come out of debt if you currently owe any.
Detailed explanation-2: -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.
Detailed explanation-3: -A budget helps you to set financial goals and save up for them-be it saving up the down payment for a home loan, for children’s education or for a business that you plan to start. A budget can help you redirect your money from unnecessary spending to important goals.
Detailed explanation-4: -Budgeting, as a control tool, provides an action plan to ensure that the organization’s actual activities are least deviated from the planned activities. Budgets are used to give an overview of the organization and its operations.
Detailed explanation-5: -From the managements perspective budget makes planning how revenue can be increased or distributed efficiently at the same time where expenses can be reduced across all the business activities. Budget is generally made keeping in mind all the business activities not a specific one.