Question

Explain any five reasons in planning an effective family budget.

What are the reasons for making a family budget?

Explain the importance of budgeting.

Answer 1

1. Budget acts as an intelligent guide to spending.
2. A rational budget can help you steer clear of debt.
3. Budgeting ensures that your spending is not greater than your income.
4. It assists you in getting ready for contingencies or unforeseen costs that might push you towards financial adversities.
5. Allows to regulate funds.
6. It helps to live within one's income
7. Avoids erratic decisions.
8. It helps to identify extravagant expenditures.
9. It helps to make proper decisions regarding what to include and omit from the main budget.
10. A budget determines how a family can use all available resources and helps identify unnecessary and extravagant expenditures.