Assignment Part 2: Theory Question on Short Term and Long Term Budgeting.
Yes, I agree that budgeting is the key component in management short and long term planning. According to the website Thinking Make Easy, “Budgeting is a process of planning, setting goals and defining the objectives of the management that are needed for a given period of time. It is the tool that provides specific direction and achievements for the company” (Para 1). As budgeting may benefit a lot in term of saving more money either for a company or yourself. This also means that budget planning is the financial plans for the control of corporate in many terms such as human resources which is the number of employee needed to efficiently finish the work, the
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In another way round, the actual first step in planning for long term depends on how long are you actually spending your time doing your short term planning as when the plan gets as long as a year or more it is consider as a long term planning, thus this helps a person to get the out of debts. By planning how much in a month that should be spend on groceries, entertainment and more. This is because these are the easiest things to lose your track into spending more. Besides, when the person is out of debt he/she can start to save money and continuously doing this will prevent one in getting to having to pay debts again. Moreover, budgeting makes us find our own ways to cut costs in our expenses. In short budgeting makes you a better and smarter consumer. There are also more reasons to get on to budgeting, it might make you retire earlier, pay your bills on time, reduces stress while you have to spend big and also not to worry when you need large changes in financial needs. In order to meet all these needs, a good budget plan must work out and thus savings are included. On the other hand, it makes a person understand where the usage of your own money is going. Once the savings are in hand, it is to learn to not overly use them. Budget is a simple plan for using money you have to get the things you want in quite a short or long time. That is why planning it in long term or short term