An operating budget is a combination of known expenses, expected future costs, a

Question

An operating budget is a combination of known expenses, expected future costs, and forecasted income over the course of a year. Operating budgets are completed in advance of the accounting period, which is why they require estimated expenses and revenues.
Do you operate your home with a budget? If so, explain how this helps you run your home more efficiently. If you do not have a budget, please explain how incorporating this into your life could help with your financial decisions.

An operating budget is a combination of known expenses, expected future costs, and forecasted income over the course of a year. Operating budgets are completed in advance of the accounting period, which is why they require estimated expenses and revenues.
Do you operate your home with a budget? If so, explain how this helps you run your home more efficiently. If you do not have a budget, please explain how incorporating this into your life could help with your financial decisions.


Do you operate your home with a budget? If so, explain how this helps you run your home more efficiently. If you do not have a budget, please explain how incorporating this into your life could help with your financial decisions.

Explanation / Answer

My home’s operating budget and cost depends on earning member of my family, and the loans we have taken for education/ home construction.

We have some savings from parent’s previous income, now they are retired, so their pension income each year and my annual income each year caters to daily operating costs and cash outflow for daily expensed in regular life as well as future investments in mutual funds and such schemes to deliver little better income, so as to regulate future lives of all.

Daily or monthly expenses are household stuff like cooking gas, electricity, house rental, taxes, water bill, property bill, medical bills etc. plus miscellaneous expenses like gifting, travelling and many more. We manage our expenses as how much we earn. Somewhere for the family benefits, we expend more, somewhere for individual benefits, we all expend less. It’s individual’s call how much and how to spend and where all to save and how much to, so that future life is bit easier for all.

This risk management in overall financial context tells, how much amount we can save in future for emergency uses like ill health/ death/ loan repayments and how much can we do for daily working capital management.

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