Comprehensive Budget

The components of a comprehensive budget are divided in two categories: The operating income, which includes all forms of recurring income and expenses; and the Capital Budget, which includes nonrecurring items. The purpose of the Operating Budget is in a comprehensive budget is to make clear the forms of income that the individual can count on, on a regular basis and the expenses that have to be made for each period. On the other hand, the capital budget exists for long term purchases and non-recurring items such as home repairs and contingencies. Specialized budgets are created by separating the activity’s or purchase income and expenditures from the main budget to isolate the financial activities associated with the activity or the purchase …show more content…
Capital expenses are often made to achieve a future goal, such as higher education or retirement and they can help the individual achieve his or her long-term goals by creating a plan of multiple and steady payments that help achieve the long-term goal. The Cash Budget: This type of budget is prepared to establish the amount of income available to meet one’s goals. This is done by listing the income expected for each period and the numbers should be reviewed on a monthly basis to reduce budget variances.ey, in a way that its use is maximized. The financial tools described in chapter 5 of the book titled Personal Finance by Rachel Siegel and Carol Yacht (2009), can be used to make better financial decisions. Monetary movements over a long period of time, when put on paper, can help the individual see the patterns created by these monetary movements, and he or she can use this information to learn about his or her spending habits, creating a better view that allows the reader to see where all the income is going, and giving the individual the opportunity to use that information to reduce unnecessary spending and improve his or her current financial