Question

How can you apply the budgeting concepts you have learned to your own lives? Why is budgeting important? What things can you learn from the process? How will it help you in your own personal financial lives? Within the body of your narrative paragraph(s), in addition to addressing the above points, write down what your short term financial goals are (the next 1-2 years), your medium range goals (3-5 years) and your longer term goals (6-10 years.)

Answer 1

The budgeting concepts are essential for consumer because they have to make choices to ensure that they allocate their budgets in an approach that they get maximum value from it. It helps to curtail expenditure on those items that are unnecessary and non-essential. We can apply the budgeting concepts in our routine activities that have a great impact on our financial lives. A household budget can provide us a clear picture of the money that is coming into the house, and can then try to increase it in different approach such as finding a better job, seeking an increase in salary, or starting a small new business with a loan. It can provide an idea of how much credit to take on without landing in serious debt concerns. Those who do not makes and follows a budget usually find themselves in a debt trap, making extravagant purchases on credit without being aware where the money will finally come from. An efficient budget in our lives teaches the younger members of the family the importance of money, and helps to stop wasting money on unnecessary activities. The importance of this knowledge on budget can be utilize when they grow up and start their own families. The short-term goals often include the food and shelter such as financial house in order by eliminate the credit card debt and establishing fund for the rainy days. Intermediate-term generally include the buying of car, studies and wedding of the child; and the long-term goals include starting a business, buying a house, and retirement plans