Personal Finances
Written Assignment Unit 4
University of the People
Introduction Unit 4 teaches us about planning our income and expenditures. We learned about the various ways to create our financial budgets. We were also had a refresher on various tools, which give us a better visual of what is going in and out of our pockets.
What financial tools described in this chapter can help you make better financial decisions? There are various types of budget plans we could create to help us make better financial decisions. In order to be able to create a budget plan we need to be familiar with the other tools that help us in our financial process.
The three most useful products of accounting and bookkeeping are the income statement, cash flow
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The process doesn’t stop there though. We should also take the time to do a risk assessment, look into the macroeconomic indicators, the time value of our money, as well as other personal factors that may affect our budget plan. (Yacht, 2009)
What are the components of a comprehensive budget and what is the purpose of each component? The components of a comprehensive budget are the operating budget and the capital budget. The operating budget includes all our recurring incomes and expenses. This budget normally shows income from salary, interest and dividends earned and are used for short-term financial goals. Your comprehensive budget plan would include information like your monthly rent and utility expenses.
The capital budget includes all nonrecurring items such as capital expenditures and the purchases of durable items. The capital budget is normally associated with our long-term financial goals. (Yacht, 2009)
How are specialized budgets prepared? What is the relationship of specialized budgets to the comprehensive
Capital Budgeting encourages managers to accurately manage and control their capital expenditure. By providing powerful reporting and analysis, managers can take control of their budgets.
Cy-Fair’s Business and Financial department develops the budget for school administrators. Once the budget summary has been developed the Principal then can decide within the budget how he would like to spend the money given by the district. Certain areas of the budget are to be spend on specific items, for example the budget for “GT/Horizon Supplies” can only be spend on GT instructional needs. On the other hand the budget for “Instructional Supplies” is more flexible. Primary example the after the Principal analyzes what are his campus needs, he then may decide on the materials he would like to spend the money on as long as it supports the needs of his campus. Although the principal is limited on how he
On January 14, 2015 the Local Finance Board (LFB), which is part of the Division of the Local Government Services in the State of New Jersey adopted Rule: N.J.A.C. 5:30-3.8, which requires municipalities in the State to complete on an annual basis a User-Friendly Budget document. As a result of this new requirement, for fiscal year 2015 beginning with calendar year municipalities (January 1 to December 31), New Jersey municipalities must submit as part of their annual budget package to the State, a User-Friendly Budget document. Additionally, the State of New Jersey is requiring that municipalities incorporate the User-Friendly Budget into the introduced municipal budget, as well as the final adopted municipal budget. Therefore with this requirement
Budgeting is a familiar term to most American families. Dictionary.com defines budgeting as an estimate, often itemized, of expected income and expense for a given period in the future. In order to avoid debt, bankruptcy, or overspending it is common to create a spreadsheet of some sort tracking your spending and income. On a grander scheme, the Unites States has to budget as well.
The purpose of a capital budget is for nonrecurring items. Capital expenditures involve long- term plans and goals. To project capital expenditures some course of action should take place which includes: new information, microeconomic factors, macroeconomic factors, and the time value of money.
A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.
I believe that all of the budget categories are extremely important to the organization. First, I believe it would be best to start with the people because grooming someone’s skills and learning to benefit from someone’s talents may take a while. Additionally, we want the clients of our group to be the main focus and it is important for the community to change their mind about passing these wonderful people over. Supplies will always be important because no one can get through a meeting without pens or paper. Space will be vital because there must be a place to meet for our organization’s development. Later on I can see things like equipment and miscellaneous
The capital budget includes all long term acquisitions. It is continuing and multi-year. It is used when assets, equipment such as vital signs machines, are purchased or invested to the departments. The operating budget includes department daily needs, personnel, and supplies. It is for a period of a year.
Provides advice, assistance, and guidance on budgeting and related information to program managers and budget-related personnel in subordinate organizations. Conducts analyses, reviews, and special studies of budget and/or related information.
Why is a financial system important to an HCO; does a budget really make a difference? The HCO is undergoing many exciting changes that effect how the HCO operates. There are technological Electronic Health Records (EHR) and Electronic Medical Records (EMR) upgrades, payment, and system billing changes and practices, and quality improvement measures. The swift changes in Healthcare include costs that require a financing budgeting system. “The financial plan is a reality check for the HCO organization” (White and Griffith 433). A finance system records and reports HCO transactions. The recorded transactions are useful to set and achieve performance improvement measures.
Participative Budgeting is the situation in which budgets are designed and set after input from subordinate managers, instead of merely being imposed. The idea behind this sort of budgeting is to assign responsibility to subordinate managers and place a form of personal ownership on the final budget. Nearly two decades of management accounting research has resulted in equivocal findings on the consequences and effects of participative budgeting (Lindquist 1995). Participative budgeting certainly has various advantages, these include the transferral of information from subordinate to superior increased job satisfaction for the subordinate, budgetary responsibility and goal congruence. Its disadvantages include budgetary slack and negative motivation, however it is the conditions in which participative budgeting takes place determines whether the budgeting process is successful. The conditions are dependent on various factors such as the level of participation, level of subordinate influence, the extent to which budgetary slack takes place, volatility, job related information, and the complexity of the budget.
With these three scenarios, I have learned several things about making a personal budget. I learned how to research the economic situation and best predict the prices for certain things. I also learned how best to manage bills under a tight and a very free budget. I learned how to manage money, not just for myself, but for others that I may one day be responsible for.
Budget is combining your income and expenses to decide how much money you are going to spend on an item. Budget is an important step to determine your financial health and financial stability. It’s an important financial tool because it can help plan for expenses, cut cost were unneeded, save for future goals, plan for emergencies that occur inexpediently, and list what you are spending and saving.
Capital budgeting is a process that analyzes and ranks the proposed projects in order to
It requires an adequate and sound organizational structure, that is, there must be a definite assignment of responsibility for each function of the enterprise. Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans. Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise. Budgeting helps the management to put down in figures what is necessary for a satisfactory performance. Budgeting helps the management to plan for the most economical use of labor, material and capital. Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives. Budgeting promotes an understanding among members of management of their co-workers' problems. Budgeting force management to give adequate attention to the effects of general business conditions. Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support