1

Borivali Education Society

Matrushri Pushpaben Vinubhai Valia College of Commerce
M. K. School Complex, Factory Land, Borivali (W), Mumbai 400092.

A PROJECT
ON

Budgetary Control

IN THE SUBJECT OF ADVANCE COST ACCOUNTING

SUBMITTED TO
UNIVERSITY OF MUMBAI,
FOR SEMSTER I OF
MASTER OD COMMERCE (ACCONTANCY)
BY
BHAVYA P. SAVLA
ROLL NO: 112
UNDER THE GUIDANCE OF
ASST. PROF. MS. BHUMIKA PATEL

YEAR 2015-16

DECLARETION BY STUDENT

MR. BHAVYA P. SAVLA The student of M.com Part-I (2015-16) Roll No: 112 hereby declare
that the project for the strategic management titled.

Budgetary Control
Submitted by me for semester-I during the academic year 2015-16 is based on actual work
carried out by me under the guidance and supervision of Asst. Prof. Ms. Bhumika Patel
I further stated that this work is original and not submitted anywhere else for the
examination.

Signature of Student.

EVALUATION CERTIFICATE
This is to certify that the undersigned have assessed and evaluated the project

Budgetary Control

Submitted by Bhavya P. Savla Student of M.Com part I. This project is original and best of our
knowledge and has been accepted for internal assessment.

Asst. Prof. Ms. Bhumika Patel

Internal Examiner

Professor V. Manikandan
External Examiner

I/C PRINCIPAL

ACKNOWLEDGEMENT

It given me immense pleasure to present this project while I taking this opportunity to thank all
of them who helped me to prepare this project and timely guidance received which help me
greatly in the competition of the project.

I would acknowledge my deep sense of gratitude to Asst. Prof. Ms. Bhumika Patel. For her
kind co-operation in this project at all stages. Her constant support, encouragement and guidance
without which the successful completion of this project would have been impossible.

I would like to thanks our respected principle, librarians and other teaching and non- teaching
staff for their corporation in this project.

Last but not least I would also like to thanks all our friends for their suggestions and valuable
help.

Once again I would like to thanks all those people who have helped me to complete this project
on time.

INDEX
SR
NO
.
1.

Budgetary Control

6-12

2.

Overview of Budget

13-39

3.

Conclusion, Suggestions, &

Recommendation

40-43

4.

Bibliography & References

44-46

CHAPTER NAME

PAGE
NO.

CHAPTER 1: BUDGETARY CONTROL

Introduction
What is budgeting? Basically, it's making sure that you're spending less than you're
bringing in and planning for both the short- and long-term.
Unfortunately, many people think of budgeting as depriving themselves and they avoid
it like they do a diet. However, just like a diet is really just a program for eating,
budgeting is just a program for spending. If you are hitting a mental roadblock when
you hear the word "budget", just call it by a different name, such as "personal financial
planning." That's what budgeting is, after all. It's a proactive approach, rather than a
reactive approach, to managing your money.
Budgeting is an important component of financial success. It's not difficult to
implement, and it's not just for people with limited funds. Budgeting makes it easier for
people with incomes and expenses of all sizes to make conscious decisions about how
they'd prefer to allocate their money. It can also help people save for retirement,
emergencies, a new car or just about anything. For many people, having a solid budget
in place, knowing how much money they have and knowing exactly where that money
is going makes it easier for them to sleep at night. (For more on saving for retirement,
see our Retirement Planning tutorial; Canadians, see the Registered Retirement Savings
Plan (RRSP) tutorial.)
This budgeting tutorial will teach you everything from setting up a budget to updating it
as your circumstances change, as well as getting back on track if you go off your
budget. Whether you're a college undergrad, retiree or somewhere in between, if you're
looking for a way to manage your money better and improve your financial situation,
then this tutorial is for you.

Budgeting
Many people think of budgeting as something to do when they're short on cash. College
students might turn to a budget to figure out how to make due with their high expenses
and limited incomes. Wise new grads create budgets to make sure they're properly
allocating their first paychecks among emergency savings, retirement savings, student
loan repayments, rent and utilities, and rewards for their hard work like new gadgets
and nights on the town. Young couples trying to figure out how to afford a wedding, or
newlyweds wondering how to fit the expense of buying a house or having a child into
their monthly cash flow, are also likely to make budgets. Of course, budgets are
commonly associated with people of all ages who are barely able to make ends meet.
The truth is that budgeting isn't just for times when your money is tight or your life is
undergoing a major transition. Budgeting is for everyone, rich and poor alike. In fact,
budgeting will be that much easier in times of change if you do it all the time. Where do
you think a Fortune 500 company like Amazon would be today without proper
budgeting? What about wealthy people like Warren Buffett? There's no way that he or
his holding company, Berkshire Hathaway, could have achieved such success without
paying attention to their monthly, quarterly and annual cash inflow and outflow.
Budgeting won't just get you out of a rut - it can also help you get rich.
Let's look at some ways budgeting can help you achieve your goals. A good budget will
help you do all of the following:
Make Long- and Short-Term Projections
A budget will help you plan for short-term expenses, like your monthly bills, and midterm expenses, like vacations, as well as long-term expenses, like buying a house,
paying for a child's college education and putting money away for retirement. When
you have a spreadsheet or notebook in front of you showing how much money you
expect to make over the next few months (or years), how much of that money goes out

every month and how much you have left to save each month, you'll always know when
you need to cut back on spending, when you can afford to loosen the reins and how
long it will take to save for major goals. And if you're not happy with the numbers,
knowing what they are will help you take steps to improve your situation, whether that
means focusing on paying off credit cards to increase your monthly cash flow, or
getting a promotion or switching companies so you can make enough money to afford
everything you need and want. (For more, read Increase Your Disposable Income.)
Prevent a Crisis
Let's say a significant expense arises unexpectedly: maybe you develop a serious
toothache and your dentist informs you that you'll need a root canal and a crown. While
you may have have dental insurance through work, you're still going to have to fork
over at least $500 out-of-pocket to get the work done. How can a budget help you
handle an expense like this?
If you're new to budgeting and don't have any emergency savings yet, or if your savings
have already been depleted by another recent emergency, your budget will help you
determine what expenses you might be able to postpone or shift around to help you pay
the unexpected bill. For example, maybe you normally pay your car insurance once a
year and it's due next month, but you can opt to pay half now and half in six months
instead to free up the cash to pay your dental bill. Or maybe your situation is tighter
than that, but you can see that if you cut next month's grocery bill from $300 to $200
and go out to eat once instead of twice, you'll be able to start making a dent in your
dental bill. Also, you may not have to pay the bill immediately. Payment of almost any
emergency expense can be postponed by at least a couple of weeks by putting it on a
credit card or asking the service provider to let you make two or three payments over
several weeks or months. Of course, if you put the expense on your credit card, you
should pay it in full when the bill is due if at all possible to avoid paying interest.
Your budget will also give you an idea of how long it will take you to replenish your
depleted savings once you pay off your dental care. (For more insight, read Build

Yourself an Emergency Fund.)

Get the Most Out of Your Money
Chances are you spend at least 40 hours working each week, and that doesn't include
the time you spend getting ready, the time you're forced to be away from home because
of commuting and lunch time, or the hours of free time that get lost because you're too
tired from working all day to enjoy them. If you're going to dedicate that much of your
life to earning a living, you owe it to yourself to make sure your money is going to the
things that are most important to you.
A budget helps you track all your expenses - large and small. It lets you find out how
much you spend on everything from coffee breaks to MP3 downloads to gasoline to
clothes. If you discover that you're spending $500 a month on clothes and that horrifies
you because you haven't been able to afford a vacation in three years, you'll know what
to do. And because you know where your money's going and you'll continue to track it,
you'll finally be able to save up for that vacation.
Plan for Major Changes
As mentioned earlier, a budget lets you model in advance how a major purchase or life
change will affect your finances. Instead of wondering if you can afford a house or
panicking about whether you and your spouse can afford to live on one income while
the other stays home to raise a child, you'll have the data you need to crunch the
numbers. You'll find out before you make any change whether you can afford it and
what sacrifices you might need to make. (For more on finances, read Get Your Finances
in Order.)
Experience the Freedom of Having Money in the Bank
By helping you sock away money each month, budgeting is an important tool for
achieving financial freedom. The ultimate freedom, of course, is being able to retire,
but along that winding road are opportunities for many rest stops if you have money in
the bank.

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Those stops might include:

having a child

starting your own business

going back to school

taking an extended vacation

Definition of Budget

The word budget is derived from Bougettee a French word meaning a leather pouch in
which funds are appropriated for meeting anticipated expenses. In fact, this is the basic
idea behind budgeting. A budget is a statement of expected results stated in numerical
terms. It is formed in advance of the period to which it applies. It is an instrument of
planning as well as control.
It serves as a standard against which actual results can be compared. A budget can be
seen as an economic plan for a given period of time. Budgeting is the process of
preparing budgets.
Budgeting is essentially a managerial process concerned with planning, co-ordination and
control. A business budget is a plan which covers all the phases of operation of an
enterprise for a definite period of time.
It is prepared for a specific future period and it expresses everything in precise numerical
terms. In a sense, a budget may be considered as a statement specifying policies and
plans to be pursued during a certain period, to achieve specified goals and objectives.

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In the words of G.R. Terry, A budget is an estimate of future needs arranged according
to an orderly basis, covering some or all of the activities of an enterprise for a definite
period of time.
According to Institute of Costs and Works Accountants, England, Budget is a financial
and/or quantitative statement prepared prior to a definite period of time, of the policy, to
be pursued during that period for the purpose of attaining a given objective.

Budgetary Control In Organization: Meaning, Definition

Meaning:
Budgetary control is the process of determining various actual results with budgeted
figures for the enterprise for the future period and standards set then comparing the
budgeted figures with the actual performance for calculating variances, if any. First of all,
budgets are prepared and then actual results are recorded.
The comparison of budgeted and actual figures will enable the management to find out
discrepancies and take remedial measures at a proper time. The budgetary control is a
continuous process which helps in planning and co-ordination. It provides a method of
control too. A budget is a means and budgetary control is the end-result.

Definitions:

According to Brown and Howard, Budgetary control is a system of controlling costs

which includes the preparation of budgets, coordinating the departments and establishing
responsibilities, comparing actual performance with the budgeted and acting upon results

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to achieve maximum profitability. Weldon characterizes budgetary control as planning

in advance of the various functions of a business so that the business as a whole is
controlled.
J. Batty defines it as, A system which uses budgets as a means of planning and
controlling all aspects of producing and/or selling commodities and services. Welsch
relates budgetary control with day-to-day control process. According to him, Budgetary
control involves the use of budget and budgetary reports, throughout the period to coordinate, evaluate and control day-to-day operations in accordance with the goals
specified by the budget.
Objectives of Budgetary
To Study Concept of Budgetary Control.
To study the types of Budget.
To study the difference between fixed & flexible Budget.
To understand how budget is carried on, what its advantages & disadvantages.
And to provide meaningful suggestions and conclusions.
Importance of Banking
It is importance to me and society as well as nation.

Methodology
There are 2 types of collection of data.
1) Primary Data:- Questionary, Interviews, Etc.
2) Secondary Data:- Books, Journals, Magazines, Newspapers, Websites, Etc.
The Researcher has mainly used secondary data because of limitation of time.

13

CHAPTER 2: OVERVIEW OF BUDGETE

Types of Budget

Revenue budget:
It consists of the revenue receipts both tax-revenue and non-tax revenue and the
expenditure met out of the revenue receipts. Revenue expenditure is further divided into
plan and non plan revenue expenditure.
Plan revenue expenditure pertains to central plan and central assistance for states and
union territory plans. Non plan revenue expenditure covers a wide variety of general,
social and economic services of the government. The major items of non-plan revenue
expenditure are interest payments, defence services and subsidies.
Capital budget:
It comprises capital receipts and capital expenditures of the government. Capital receipts
include market loans, borrowing from RBI and others. Capital receipts of the government
are those which create liability or reduce financial assets, while those expenditures of
government which lead to the creation of physical or financial assets or reduction in
recurring financial liabilities fall under the category of capital expenditure.
Such expenditures pertain to payments on acquisition of assets like land, buildings,
machinery, equipment, etc.

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Legislative and Executive Budget:

A legislative Budget is prepared by the various committees appointed by the legislature
from among its members. An executive budget, on the other hand, is the one which is
prepared by the executive branch of the government. Such a budget is normally passed
and adopted by the legislature but the initiative is in the hand of government.

Conventional and Cash Budget:

In the conventional budget, revenue and expenditure are shown on accrual basis and
those flows of funds are excluded which do not belong to the government. In the cash
budget, all the flows of funds to and from the government on actual payment basis are
shown, inclusive of funds which are not owned by the government.
Unified and Multiple Budget:
In USA, there was tradition to present budget into parts, to make it possible to evaluate
specialized functions of the government. But it is felt that true fiscal operations of the
government gets scattered and difficult to trace in case of multiple budget.
Thus, the best way is to present unified budget in which important sub-portions are
classified, and presented separately.
Budget of the Union Government in India:
In India, the Constitution demands that the budget must distinguish expenditure on
Revenue Account from other expenditure. Accordingly, the budget is necessarily
presented into two parts, namely Revenue Budget and Capital Budget.

Fixed Budget Vs Flexible Budget

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Comparison Chart

BASIS
OF
COMPA

FIXED BUDGET

FLEXIBLE
BUDGET

RISON

Meaning

The budget designed

The budget designed to

to remain constant,

change with the change

regardless of the

in the activity levels is

activity level reached

Flexible Budget.

is Fixed Budget.

Nature

Static

Dynamic

Activity

Only one

Multiple

Performan

Comparison between

It provides a good base

ce

actual and budgeted

for making a

Evaluatio

levels cannot be done

comparison between

accurately, if there is a

the actual and budgeted

distinction in their

levels.

Level

activity levels.

Rigidity

Fixed Budget cannot

Flexible budget can be

be modified as per the

easily modified in

actual volume.

accordance with the

activity level attained.

Estimates

Based on assumption

Realistic and Practical

16

Definition of Fixed Budget

For understanding the term fixed budget, first know the meaning of the two words fixed
and budget. Fixed means firm or stable and budget is an estimate of economic activities
of the business. So in this way, Fixed Budget refers to an estimate of pre-determined
incomes and expenditures, which once prepared, does not change with the variations in
the activity levels achieved. It is also known as Static Budget.
Fixed Budget is best suited for the organizations where there are less chances of
fluctuations in the prevailing conditions or if the organization is not influenced by the
change in the external factors and the forecasting can be done easily to give close results.
It also works as a yardstick to control costs.
Fixed Budget helps the management to set the revenues and expenses for the period, but
it lacks accuracy because it is not always possible to correctly determine future needs and
requirements. Further, it operates only on a single activity level under only one condition.
While framing the fixed budget, it is assumed that the existing conditions are not going to
be changed in the near future, which proves untrue. So in this way, it difficult to measure
the performance, efficiency or capacity.
Definition of Flexible Budget
Flexible means easily adjustable and Budget refers to an anticipated plan made for the
financial activities of the entity. Therefore, flexible budget is a financial plan created for
different activity levels. It can be freely adjusted or re-casted on the basis of output
produced. It is logical and practical because, cost can be easily determined at various
activity levels.
While preparing a flexible budget first of all, the costs are divided into three major
segments, namely: fixed, variable and semi-variable where semi- variable costs are
further classified into fixed and variable cost and then budget is designed accordingly. A
number of budgets are prepared for alternative output levels to show the amount of
expense to be reached at each level of activity.

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Flexible Budget is best suited for the organization where there is a high degree of
variability in sales and productions or the industries which can be easily affected by the
external factors or fluctuations in the market conditions are relatively high etc.
Key Differences Between Fixed Budget and Flexible Budget
The following are the major differences between fixed budget and flexible budget:
1.

The budget, which remains constant, regardless of the actual output levels is known as
Fixed Budget. Flexible budget, is a budget which can be easily adjusted according to the output
levels.

2.

Fixed Budget is static in nature while Flexible Budget is dynamic.

3.

Fixed Budget operates in only one activity level, but Flexible Budget can be operated on
multiple levels of output.

4.

Fixed Budget is based on the assumption, whereas Flexible Budget is realistic.

5.

Fixed Budget is inelastic, as it cannot be re-casted as per the actual output. Conversely,
Flexible budget is elastic because it can be easily adjusted according to the volume of output.

6.

Flexible Budget proves more accurate to evaluate the performance, capacity and
efficiency of the activity level compared to Fixed Budget.

Advantages of Budgeting

Planning orientation:
The process of creating a budget takes management away from its short-term, day-to-day
management of the business and forces it to think longer-term. This is the chief goal of
budgeting, even if management does not succeed in meeting its goals as outlined in the
budget - at least it is thinking about the company's competitive and financial position and
how to improve it.

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Profitability review:
It is easy to lose sight of where a company is making most of its money, during the
scramble of day-to-day management. A properly structured budget points out what
aspects of the business produce money and which ones use it, which forces management
to consider whether it should drop some parts of the business, or expand in others.

Assumptions review:
The budgeting process forces management to think about why the company is in
business, as well as its key assumptions about its business environment. A periodic reevaluation of these issues may result in altered assumptions, which may in turn alter the
way in which managements decides to operate the business.

Performance evaluations:
You can work with employees to set up their goals for a budgeting period, and possibly
also tie bonuses or other incentives to how they perform. You can then create budget
versus actual reports to give employees feedback regarding how they are progressing
toward their goals. This approach is most common with financial goals, though
operational goals (such as reducing the product rework rate) can also be added to the
budget for performance appraisal purposes. This system of evaluation is
called responsibility accounting.

Funding planning:
A properly structured budget should derive the amount of cash that will be spun off or
which will be needed to support operations. This information is used by the treasurer to
plan for the company's funding needs.

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Cash allocation:
There is only a limited amount of cash available to invest in fixed assets and working
capital, and the budgeting process forces management to decide which assets are most
worth investing in.

Bottleneck analysis:
Nearly every company has a bottleneck somewhere, and the budgeting process can be
used to concentrate on what can be done to either expand the capacity of that bottleneck
or to shift work around it.

Disadvantages of Budgeting

Time required:
It can be very time-consuming to create a budget, especially in a poorly-organized
environment where many iterations of the budget may be required. The time involved is
lower if there is a well-designed budgeting procedure in place, employees are accustomed
to the process, and the company uses budgeting software. The time requirement can be
unusually large if there is a participative budgeting process in place, since such a system
involves an unusually large number of employees.

Gaming the system:

An experienced manager may attempt to introduce budgetary slack, which involves
deliberately reducing revenue estimates and increasing expense estimates, so that he can
easily achieve favorable variances against the budget. This can be a serious problem, and
requires considerable oversight to spot and eliminate.

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Blame for outcomes:

If a department does not achieve its budgeted results, the department manager may
blame any other departments that provide services to it for not having adequately
supported his department.

Expense allocations:
The budget may prescribe that certain amounts of overhead costs be allocated to various
departments, and the managers of those departments may take issue with the allocation
methods used.

Spend it or lose it:

If a department is allowed a certain amount of expenditures and it does not appear that
the department will spend all of the funds during the budget period, the department
manager may authorize excessive expenditures at the last minute, on the grounds that his
budget will be reduced in the next period unless he spends all of the amounts authorized
in the current budget.

Only considers financial outcomes:

Budgets are primarily concerned with the allocation of cash to specific activities, and the
expected outcome of business transactions - they do not deal with more subjective issues,
such as the quality of products or services provided to customers. These other issues can
be stated as part of the budget, but this is not typically done.

Strategic rigidity:

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When a company creates an annual budget, the senior management team may decide that
the focus of the organization for the next year will be entirely on meeting the targets
outlined in the budget. This can be a problem if the market shifts in a different direction
sometime during the budget year. In this case, the company should shift along with the
market, rather than adhering to the budget.
Functional Budgets
A functional budget is a budget which relates to any of the functions of an undertaking,
e.g., sales, production, research and development, cash etc.
Following functional budgets are generally prepared:

(i) Sales Budget:

Sales budget is the most important budget and of primary importance. It forms the basis
on which all the other budgets are built up. This budget is a forecast of quantities and
values of sales to be achieved in a budget period. Every effort should be made to ensure
that its figures are as accurate as possible because this is usually the starting budget (sales
being limiting factor on which all the other budgets are built up).
The Sales Manager should be made directly responsible for the preparation and execution
of the budget. The sales budget may be prepared according to products, sales territories,
types of customers, salesmen etc.
(ii) Production Budget:
Production budget is a forecast of the total output of the whole organisation broken down
into estimates of output of each type of product with a scheduling of operations (by
weeks and months) to be performed and a forecast of the closing finished stock. This
budget may be expressed in quantitative (weight, units etc.) or financial (rupees) units or
both.

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This budget is prepared after taking into consideration the estimated opening stock, the
estimated sales and the desired closing finished stock of each product. Suppose, if the
estimated opening stock of product X is 2,000 units and the estimated sales is 15,000
units and the closing stock of the product is 2,500 units the estimated production will be
15,000 + 2,500 2,000 (Sales + closing stock opening stock) = 15,500 units.
The Works Manager is responsible for the total production budget and the departmental
managers are responsible for the departmental production budget.
(iii) Cost of Production Budget:
After determining the volume of output the cost of procuring the output must be obtained
by preparing a cost of production budget. This budget is an estimate of cost of output
planned for a budget period and may be classified into material cost budget, labour cost
budget and overhead budget because cost of production includes material, labour and
overheads.
iv) Labour and Personnel Budget:
Direct Labour Budget:
This budget gives an estimate of the requirements of direct labour essential to meet the
production target. This budget may be classified into labour requirement budget and
labour recruitment budget. The labour requirement budget is developed on the basis of
requirement of the production budget given and detailed information regarding the
different classes of labour, e.g. fitters, welders, turners, millers, grinders, drillers etc.,
required for each department, their scales of pay and hours to be spent.
This budget is prepared with a view to enable the personnel department to carry out
programmes of training and transfer and to find out sources of labour needed so that
every effort may be made to remove difficulties arising in production through lack of
suitable personnel.

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Labour recruitment budget is prepared on the basis of labour requirement budget after
taking into consideration the available workers in each department, the expected changes
in the labour force during the budget period due to the labour turnover.
This budget gives information about the personnel specifications for the jobs for which
workers are to be recruited, the degree of skill and experience required and the rates of
pay. In preparing the labour cost budget, the question of overtime should not be
overlooked because workers are to get higher rates of wages if they work on overtime.
Regular overtime should be avoided by engagement of additional workers and extension
of plant. Where standard costing system is applied, the labour cost budget is developed
on the basis of standard labour cost per unit multiplied by the quantity of anticipated
production determined in the production budget. If standard costing system is not being
followed in the organisation, the information of labour cost may be obtained from past
records or estimated cost.
(v) Manufacturing (or Production) Overheads Budget:
This budget gives an estimate of the works overhead expenses to be incurred in a budget
period to achieve the production target. The budget includes the cost of indirect materials,
indirect labour and indirect works expenses. The budget may be classified into fixed cost,
variable cost and semi-variable cost. It can be broken into departmental overhead budget
to facilitate control.
In preparing the budget, fixed works overhead can be estimated on the basis of past
information after taking into consideration the expected changes which may occur during
the budget period. Variable expenses are estimated on the basis of the budgeted output
because these expenses are bound to change with the change in output.
The Cost Accountant prepares this budget on the basis of figures available in the
manufacturing overhead ledger or the head of the workshop may be asked to give
estimates for the manufacturing expenses. A good method is to combine the estimates of
the Cost Accountant and the shop executive.

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vi) Administration Expenses Budget:

This budget covers the expenses incurred in framing policies, directing the organisation
and controlling the business operations. In other words, the budget provides an estimate
of the
expenses of the central office and of management salaries. The budget can be prepared
with the help of past experience and anticipated changes.
Budget may be prepared for each administration department so that responsibility for
increasing such expenses may be fixed and related to the different executives. Much
difficulty is not experienced in developing such budget as most of the administration
expenses are of a fixed nature.
Although fixed expenses remain constant and are not related to sales volume in the short
run, they are dependent upon sales in the long run. With a small change in output, they do
not change.
However, if there is a persistent fall in output, administration expenses will have to be
reduced by discharging the services of some members of the staff and taking other
economy measures. On the other hand, with persistent increase in output or business
activity, administration expenses will increase but they may lag behind business activity.
(vii) Plant Utilisation Budget:
This budget lays down the requirements of plant capacity to carry out the production as
per the production programme. This budget is expressed in terms of convenient physical
units as weight or number of products or working hours.
Establishing a Budget

Do you ever wonder where your money goes each month? Does it seem like you're never
able to get ahead? If so, you may want to establish a budget to help you keep track of
how you spend your money and help you reach your financial goals.

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Examine your financial goals

Before you establish a budget, you should examine your financial goals. Start by making
a list of your short-term goals (e.g., new car, vacation) and your long-term goals (e.g.,
your child's college education, retirement). Next, ask yourself: How important is it for me
to achieve this goal? How much will I need to save? Armed with a clear picture of your
goals, you can work toward establishing a budget that can help you reach them.
Identify your current monthly income and expenses
To develop a budget that is appropriate for your lifestyle, you'll need to identify your
current monthly income and expenses. You can jot the information down with a pen and
paper, or you can use one of the many software programs available that are designed
specifically for this purpose.
Start by adding up all of your income. In addition to your regular salary and wages, be
sure to include other types of income, such as dividends, interest, and child support. Next,
add up all of your expenses. To see where you have a choice in your spending, it helps to
divide them into two categories: fixed expenses (e.g., housing, food, clothing,
transportation) and discretionary expenses (e.g., entertainment, vacations, hobbies). You'll
also want to make sure that you have identified any out-of-pattern expenses, such as
holiday gifts, car maintenance, home repair, and so on. To make sure that you're not
forgetting anything, it may help to look through canceled checks, credit card bills, and
other receipts from the past year. Finally, as you list your expenses, it is important to
remember your financial goals. Whenever possible, treat your goals as expenses and
contribute toward them regularly.
Evaluate your budget
Once you've added up all of your income and expenses, compare the two totals. To get
ahead, you should be spending less than you earn. If this is the case, you're on the right
track, and you need to look at how well you use your extra income. If you find yourself
spending more than you earn, you'll need to make some adjustments. Look at your

26

expenses closely and cut down on your discretionary spending. And remember, if you do
find yourself coming up short, don't worry! All it will take is some determination and a
little self-discipline, and you'll eventually get it right.
Monitor your budget
You'll need to monitor your budget periodically and make changes when necessary. But
keep in mind that you don't have to keep track of every penny that you spend. In fact, the
less record keeping you have to do, the easier it will be to stick to your budget. Above all,
be flexible. Any budget that is too rigid is likely to fail. So be prepared for the unexpected
(e.g., leaky roof, failed car transmission).
Characteristics:
(a) It is framed in advance keeping an eye on a future plan of action.
(b) It is for a future period and is based on objectives to be achieved.
(c) It is a financial and/or quantitative statement prepared for the execution of policy
formulated by the top management.
Budget is used as a technique both for planning as well as for control. As a tool of
planning, a budget expresses plan to numerical figures and informs people what is
expected of them. Budgets explain programmes and determine the steps to be taken to
attain the estimated results.
As a device of controlling, a budget serves as a standard for the measurement and
evaluation of actual performance. It assists in the delegation of authority and fixation of
responsibility. Budgeting also encourages co-ordination enabling all the sub-divisions to
work towards the common objectives.
Budgeting Basics - Setting Up A Budget
Now you know why having a budget is so important. It can help you:

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Make long- and short-term projections about your financial situation.

Avert a financial crisis.

Get the most from your money.

Plan for major financial changes

Achieve peace of mind

If you've never had a budget, you may be feeling daunted by the prospect of setting one
up. In this section, we'll show you how to set up a budget. We'll provide a sample budget
and give you a downloadable Excel template to use if you'd rather not design your own.
First, let's discuss the various systems you could use to track your money:

Notebook and Pen: This least-expensive option is within anyone's means. It doesn't
require a computer or the additional software expense. You can easily carry it with you
and access it at any time, and electronic failure won't cause you to lose your data.
However, notebooks can be misplaced, and meticulous record keeping can be ruined by
the swift tip of a nearby glass of water. Perhaps most importantly, it's easier to make
mistakes by hand, and it's more difficult to track your long-term spending and savings
patterns with a notebook.

Spreadsheet: If you have a computer, chances are it came with Microsoft Excel. If it
didn't, you can download Open Office to get a free spreadsheet program that's compatible
with Excel. If you use a spreadsheet to track your income and expenses, you're less likely
to make mistakes, and you can easily do calculations like how much you spent on
groceries for the entire year. In addition, a spreadsheet can keep a running total of how
much money you have left to spend in a particular month that adjusts every time you
enter a new expense into your spreadsheet.

28

Financial Software, such as Quicken and Microsoft Money: The obvious drawback of
these programs is that they cost money and may have to be upgraded (for a fee) every
couple of years, particularly if you get a new computer with a new operating system.
However, they can do much more than a spreadsheet. They keep track of your bank
and investment accounts for you, for example, sparing you from logging into all those
accounts. The down side is that if your computer gets stolen or hacked, you might wish
so much of your personal information wasn't so readily available. (For more on investing,
see Investing 101 tutorial.)

Online Software: The most recent entrant to the personal financial planning game is
online budgeting software. Some of these programs are free and have as many features as
paid programs. Also, since they're Internet-based, you can access them from anywhere you don't have to be on your home computer. Some people might not feel comfortable
giving all their information to an online service, and no matter how well-designed it is,
any online system could have weaknesses that hackers can exploit. However, if you're
just using it to calculate the running balances for your savings and grocery, bills and other
expenses, it might be a nice tool to have.
Simple Steps to Using Your Budget
Once you've chosen the system that's best for you, how do you start using it?
1. Keep Track of Every Expense, Including the Small Ones
It's easy to remember how much you spent on rent or your mortgage payment, but for
other expenses, you'll want to save your receipts. If that drives you crazy, put all your
purchases on the same debit or credit card to make record keeping easy. Keep in mind,
though, that the transaction descriptions on your credit card statement aren't always
crystal clear, and you may be left wondering what exactly is that $19.17 purchase. Don't
forget too, that you may be charged for each transaction, and if you don't pay off your
credit card on time, you'll be accruing interest as well. (For more about mortgages, see
our Mortgage Basics tutorial.)

29

Another option is to use cash for the small expenses, but only withdraw a certain amount
each week or month and enter this in your budget as "miscellaneous." While this method
may prevent you from overspending, it will not give you the clearest picture of where
your money is going.
2. Update Your Budget - Daily
Tracking your money this way will take minimal time, and you'll be less likely to forget
something.
3. Use Accurate Descriptions
Write down your expenses by what they are rather than where you purchased them so
you'll be able to figure out later how much you spend in particular categories. For
example, if you shop at a big box store like Wal-Mart (NYSE:WMT) or Target
(NYSE:TGT), you might make a purchase that includes groceries, clothing and
household cleaning supplies. If you list the purchase under "Wal-Mart," you won't really
know where that $150 went.

4. Budget by the Month, Not the Paycheck

This forces you to think slightly longer-term than your bimonthly paycheck, but not so
long-term that you're likely to get derailed. Also, you'll get a fresh start every month. If
you have a bad month, it's in the past after 30 days. If you have high expenses one month,
you can look forward to the following month when, for example, your car insurance isn't
due.
5. Plan for Both Fixed and Variable Expenses
Fixed expenses are items like rent and health insurance, and variable expenses are things
like utilities and gas. Some costs, like groceries, can fall into either category depending
on how much self-control you have.
6. Plan for Occasional Expenses

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Budget for expenses that only happen a few times a year like gifts, car insurance and
doctor visits. If you have enough room in your budget, you can pay for these as they
occur. If you're on a tighter budget, set aside additional savings ahead of time. There is no
excuse for going into debt because you didn't realize that Christmas happens every year
or that you would need a bridesmaid dress or a tux when your best friend gets married a
year from now.
Your budget can be more or less detailed depending on your level of self-control. Can
entertainment be grouped under miscellaneous, or do you tend to spend so much on
movies, restaurants and concerts that this needs to be its own category?
In addition, budgeting is a little different if you have a steady income versus an irregular
one. If you're paid hourly or on commission, are self-employed, work seasonally or are a
student, you probably won't know how much you're going to make until the month is
over. Irregular pay makes budgeting a little trickier, but it's still feasible. You will still
have to cover certain expenses no matter what, and if you've been in the same line of
work for awhile, you probably have a good idea of the minimum amount of money you're
likely to make. Budget around that minimum and you might be pleasantly surprised at the
end of the month if you make more.
Budget Example
Our budget spreadsheet is easily adjustable to accommodate different budgeting needs
and styles. Here's an example:

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You can make your own, too. All you have to do is change the income
and spending categories to reflect your personal situation. Then copy
the sheet 11 times so you have a worksheet for each month of the
year. This makes it easy to plan in advance as well as look back on past
months and see how you did.

Budgeting Basics - Budget Boot camp

To plan for the short- and long-term, you'll need to have a rudimentary understanding of
your finances. In this section, we'll give you the kick-start you need to begin your budget
boot camp.
Know Your After-Tax Monthly Income
Everyone knows his/her hourly wage or monthly salary, but not many people can tell you
how much they take home after taxes. It's important to know this number because taxes

32

significantly reduce your paycheck, especially if you have to pay state and/or local taxes.
The easiest way to find out how much you really make is to look at your last pay stub, but
if you don't have one handy, you can calculate your take-home pay using an online
calculator like the ones found at PaycheckCity.com. Or, if you want to understand the
formula that the Internal Revenue Service (IRS) uses, check out the federal tax rate
schedules.
A comprehensive understanding of taxes isn't necessary to keep a good budget, but if
you're curious, here's how income tax works:

Ensure That Necessities Fall Within After-Tax Income

Once you know how much you really make each month, start by listing all of your
necessary expenses, like rent and utilities, and making sure their total cost is less than
your take-home pay. If it isn't, can you cut back somehow? Housing expenses take up the
largest chunk of most people's budgets, so that's the best place to think about reducing
your expenses if you're having trouble making ends meet. If you can't reduce the cost of
your necessities, it's time to figure out how to get a higher-paying job, which may involve
a longer-term strategy like obtaining a vocational or college degree. (To learn more about
investing in your education, read Invest In Yourself With a College Education.)
If you can, consider savings as one of your necessities. This will make you more likely to
save because you'll think of it as a necessary "expense" rather than an optional one. As
the saying goes, "pay yourself first." This will help keep you from running up your credit
when the unexpected occurs, and it can help you achieve your life goals faster.

Some Required Expenses Don't Occur Monthly

Costs like car insurance and visits to the doctor may not be monthly charges for you, but
rather expenses you pay only once or twice a year. Nonetheless, you have to pay them, so

33

don't forget to factor them into your necessities. One way to do this is to make a list of all
your expenses that only occur a few times a year, add up their total cost, divide it by 12,
and add the result to your required monthly savings. This will ensure that you have
enough cash on hand to pay these bills when they are due.
Check Your Breathing Room
Hopefully, you still have some money left over after meeting your basic necessities.
Make sure you know what this amount is so you won't exceed it. If you're not satisfied
with how much fun money you have, use the ideas in the last section to increase your
cash flow. Since not having as much fun money as you'd like isn't as dire of a situation as
not being able to pay for food or shelter, you can consider short-term strategies to
increase your income, like acquiring a temporary second job or selling some possessions
you no longer use.
Some Discretionary Expenses Also Aren't Monthly Costs
Expenses like gym memberships, vacations and gifts are not actually required expenses
and they may not be the same price each month. So, if you want to be able to afford them,
you should again make a list of all these optional expenses that only occur a few times a
year, add up their total cost, divide that sum by 12 and add the result to your optional
monthly savings. This way, you won't be tempted to go into debt or have to skip out on
these items.
Calculate Long-Term Costs for Necessities and Discretionary Spending
To determine whether your spending in a certain category is really worth it to you, think
of it in terms of yearly rather than monthly cost. Maybe $1,700 a month for a luxury
apartment seems like an acceptable price, but how about $20,400 a year? And that's after
tax. If that luxury apartment is in Chicago, for example, the first $25,000 you earn will
just cover your housing costs because the combined federal and state taxes
in Illinois require you to earn $25,000 to take home $20,000. If that expense is worth it to
you and you can afford it, there's nothing wrong with it, but sometimes looking at the big
picture makes spending seem less pleasant.

34

Now let's move on to part 5, where we'll share some tips for managing and staying within
your budget.
Budgeting Tips
When you're getting used to budgeting for the first time, it's helpful to know how to
manage and stay within your budget.

First and most importantly, allow yourself to be flexible. If you want to spend more on
groceries one month because you're having a party or craving something gourmet, there's
nothing wrong with that. Just spend less in another area to compensate. Don't expect to
always stick within the amounts that you set for yourself as guidelines when you first
created your budget.

Next, make sure to leave room in your budget for some fun things. Maybe your budget is
so tight that the most fun you can afford are the ingredients to make some chocolate chip
cookies, but at least allow yourself that. Or maybe you're in a better situation financially
and the choice is between saving 12% for retirement one month or buying a concert ticket
and still saving 10%. You should reward yourself. For most people, lifestyle tends to
inflate when income goes up. This isn't inherently a bad thing as long as you are still
meeting your financial goals and obligations. After all, if you reward yourself the same
way on a $7.50 an hour wage or a $75,000 a year salary, where's the incentive to work
harder? If you don't reward yourself, it will be emotionally difficult to stick to your
budget in the long run.

Always make sure, however, to keep spending below your income. Special events like
Christmas should also fit into your income. Rather than pile the gift purchases onto your
credit card in December, buy gifts throughout the year or save a little each month to make
the holiday affordable. (To learn how to budget for the holidays, read Keep Holiday Debt

35

From Snowballing.)

Don't go into debt for things that are not long-term investments (long-term investments
being a house or an education that you can reasonably afford). Consumer debt will strike
a major blow to your finances. When you finance a car, for example, not only does the
asset depreciate every year, cost money to maintain and eventually become obsolete,
you're also losing money on interest every month. (For more insight on consumer debt,
see Digging Out of Personal Debt.)

If you don't have enough cash on hand every month no matter what, or if you tend to
spend money you know you should be saving, consider adjusting your withholding. To do
this, you'll need to fill out a new W-4 form and give it to your employer. If you want, you
can even download and print the form yourself from the IRS website.
One reason you have taxes withheld from each paycheck is that if you haven't paid at
least 90% of your tax liability by the end of the year, you'll have to pay a penalty. The W4 instructions are designed to get you in above this threshold. However, if you normally
have little or no tax liability in April, you may be able to claim fewer allowances and get
more of your pay monthly instead of waiting for a refund in April.

Conversely, if you have more than enough money to meet your monthly obligations, but
any extra money tends to burn a hole in your pocket, you can increase your allowances,
essentially allowing the government to save your money for you. Then, you'll get a bigger
refund in April. You can even have the IRS deposit your refund directly into the account
of your choice, like a savings account, eliminating all temptation for you to spend it.

Likewise, if your employer offers direct deposit, you may be able to deposit a portion of
your paycheck directly into a savings account. If you already have sufficient cash

36

reserves, you could also improve your savings rate by increasing the amount of your
paycheck that goes directly into your retirement account. Again, these options will put a
portion of your money automatically out of sight and out of mind.
Additional Tips

Rent: You don't have to wait until the first of the month to pay your rent. If you
comfortably have the money in your account earlier and think you might spend it, just
send in your check early

Mortgage: If you're a homeowner, making an extra payment toward your principal when
you can afford it will shorten the life of your loan and the amount of interest you'll
ultimately pay. This tactic may not be terribly rewarding in the short-term, but you'll
thank yourself for it down the road.

Utilities: Switching to compact fluorescent bulbs, especially in the lights you use most,
will dramatically reduce the lighting component of your electric bill. Keeping your
thermostat slightly lower in the winter and slightly higher in the summer than what you'd
optimally like will reduce your heating and cooling costs, and you'll probably get used to
it after a few days. Using ceiling fans and wearing more or less clothing are a lot less
expensive than using more energy.

Clothing: The deepest discounts are generally available at end-of-season sales. The rest
of the time, you can save money by getting a store credit card that offers cash back
rewards or coupons (make sure to pay off the card in full and on time every month or you
won't come out ahead), signing up for store email lists to get special coupons, and buying
gift cards at a discount on eBay (Nasdaq:EBAY)

37

Groceries: Many of us have stockpiles of food in the freezer and pantry that we've seen
so many times, we've forgotten they're there. Determine how to incorporate these items
into your meals and you'll get a break on the cost of groceries while you clean out your
closet.

Transportation: Plan errands so that you don't make multiple trips. Go to the grocery
store on the way home from work, or do all your errands for the week on Saturday
morning. As an added bonus, you'll save time in addition to money and gas.
Now you have lots of ideas for how to stick to your budget. In part 6, we'll discuss how to
use your budget as a tool to achieve your goals.

Budgeting Mistakes to Avoid

Everyone makes financial mistakes from time to time - that's just part of life. However,
knowing about common mistakes beforehand can reduce your odds of making them. Let's
take a look at some of these common budgeting mistakes:
Mistake #1 - Forgetting to Write Down Expenses
It's impossible to stick to your budget if you don't know where your money is going.
Ideally, you need to keep track of every single purchase, whether it's something small like
a parking garage fee or something bigger like a new television. The best way to
remember everything you buy is to update your budget each night before you go to bed
while your purchases are still fresh in your head. You could also carry around a small
notebook so you can jot down your purchases throughout the day as you make them, or
make all your purchases with the same debit or credit card (effectively having someone
else create the spending list for you).
The most simple budget-tracking tool is the cash envelope method. This involves taking
several envelopes, writing the name of the budget category on the outside (like
"groceries" or "fun money"), putting the amount of cash you are allowed to spend each
month in them, and then making sure you don't run out of that cash before the month is

38

over. This method will prevent you from overspending, but you won't reap the benefits of
knowing exactly where your money goes unless you can remember to replace the money
you take out with the receipts of each item you bought.

Mistake #2 - Intentionally Not Writing Down Purchases

One of the ugly truths about budgeting is that when you keep track of your expenses, it's
pain fully clear when you've gone off track. That's the whole point, though, and every day
is a fresh chance to make better decisions. Go ahead and write it down when you've gone
over your budget, because that negativity you feel will help prevent you from
overspending more or doing it again. Just think of this step as damage control - don't skip
writing down expenses just because they don't match up. Own up to your purchases and
then move on.
Mistake #3 - Buying On Impulse
If you buy a pack of gum in the checkout lane every time you go to the grocery store and
you go to the grocery store twice a week, that seemingly inconsequential purchase is
costing you $8 a month, or almost $100 a year. Add a few impulse buys at a few other
stores over the course of a month and no matter how inexpensive they are individually,
they will add up. There's nothing wrong with buying gum, but if you notice by reviewing
your budget that you're buying it at a rate of 52 packs a year, you can plan to buy your
gum in bulk at a big box store for a third of the price and save money. Writing down even
those minor $1 purchases every time can help you spend more wisely in the long run.
Mistake #4 - Becoming the Victim of Budget Busters
Sometimes you go out to do something or buy something expecting it to cost a certain
amount of money - an amount you've budgeted for - but when you get home you've spent
much more. How does this happen?
Perhaps you decide to go out with some friends on a Saturday night and you think you're

39

just going to a bar, but once you get there the group decides to go out to eat. You're
already along for the ride, so it's easier to give in to the pressure to join in on the food
rather than be the odd one out. In that same scenario, after you've had a couple drinks,
money may not seem like such a big deal and you may buy everyone a round against
your normally better judgment. (Learn more by reading Budget Without Ditching Your
Friends.)
These things happen, and you won't always be emotionally strong enough to prevent
them. However, if you know that you have a tendency to buy more than just one thing
when you go to the store, or if you know that your friends have a tendency to change
their plans at the last minute, either avoid these activities or create a bigger budget for
them ahead of time.
Mistake #5 - Being so Frugal it Makes You Miserable
Budgeting is like dieting: If you try to deprive yourself too much, you'll just binge later
and throw all your hard work out the window. A spending binge can set you back far
more than treating yourself occasionally, so go for the occasional minor splurge. Buy that
bottle of wine or those new flowers for your yard. Let yourself take a vacation. Just keep
your treats within your spending limits and you'll be fine. This may mean you're saving
$200 a month instead of $300, but it's better than saving $300 a month for six months,
making yourself miserable in the process, then going out and blowing $2,500 in the
seventh month.
Mistake #6 - Ignoring the Time Value of Money
Sometimes the cheapest way isn't the best way. If milk, bread and eggs are cheaper at one
grocery store and chicken, butter and cereal are cheaper at another, you shouldn't go to
both stores every week to get the best possible deal on each and every item. Besides,
unless you have incredible self control, you'll probably be tempted to buy something at
the second store that wasn't on your list, thus defeating your whole purpose.
Correcting Your Mistakes

40

Correcting your budget mess-ups isn't hard, it just takes a few moments to realign your
thinking patterns:

Think about your spending not only in terms of money but also in terms of time,
aggravation and sanity. When you have limited time, determine where your moneysaving efforts are best spent. For example, should you focus on cutting out coupons to
save 30 cents at the grocery store, or would you come out further ahead by using that
time to switch over to a checking account that doesn't charge a monthly maintenance fee
and a low balance fee? (For more, read Understanding The Time Value Of Money.)

Everyone will go off his or her budget occasionally no matter how much money is
available. It's human nature to be imperfect. Accept it as a certainty that will happen.
While it shouldn't be an excuse for poor choices, the best way to correct your mistakes is
not to beat yourself up for them. Take what actions you can to correct the mistake maybe you can return something you purchased, or make up for the extra spending by
selling something you own on eBay. Maybe there's nothing you can do except vow to do
better next time. Then, forgive yourself and start fresh.
If you need help staying on track, ask someone to hold you accountable. This could be a
friend, relative, significant other, spouse or even a financial advisor. Pick someone with
whom you feel comfortable discussing money. This doesn't mean you have to share with
them the details of how much you spend and make, but you should at least be willing to
speak honestly with this person about what your goals are, what steps you are taking to
achieve them and whether you are staying on track. It's important to pick someone who
won't be judgmental if you slip up or set a goal they don't necessarily agree with.

Staying On Track
For some people, an independent professional, such as a financial advisor may be the best
bet for keeping you in line without picking a side. You may think you can't afford the
hourly fee, but if you're routinely spending $300 a month on items you don't need, and

41

being held accountable by a professional only costs you $100 a month, you'll still be
coming out ahead. On the other hand, you don't want to go too far in the other direction
and pick someone who will give you no flack whatsoever if you aren't achieving your
goals. Pick someone who has been supportive in the past and wants to see you succeed.

CHAPTER 3: CONCLUSION, SUGGETIONS, & RECOMMENDATION

Conclusion
Budgeting is an important component of financial success and one
that's not difficult to implement. Let's recap what we've learned in this
tutorial:

Budgeting isn't just for poor people or for times when money is tight or your life is
undergoing a major transition. Budgeting is for everyone because it makes it easier to
achieve financial goals of all shapes and sizes, whether that goal is to stay out of debt
next month or to pay cash for a sports car.

Budgeting allows you to make long- and short-term projections about your financial
situation, prevent crises, get the most out of your money, plan for major life changes and
enjoy peace of mind.

Budgeting systems - ranging from a simple notepad and pen to online financial
management software - are available for all needs and preferences.

42

Budgeting monthly, rather than by the paycheck, can help you learn to take a longer-term
view of your finances. (For related reading, see The Beauty of Budgeting.)

Keep track of all your expenses, not just the big ones. Those daily lattes can add up!

Getting a basic sense of your financial picture is an important component of budgeting.

Make sure you know how much you make after taxes and how your required and optional
expenses fit into that picture.

Being flexible with your budget categories and allowing yourself affordable rewards will
prevent budgeting from being a drag and help you stick with it.

A well-maintained budget can help you meet short-term goals, like saving for a vacation,
as well as long-term goals, like saving for retirement.

Avoid budgeting mistakes like being so frugal it makes you miserable or ignoring
the time value of money. Since you've already learned about these and other common
budgeting mistakes and how to correct them, you probably won't make them. If you do
mess up, remember that you're only human. Forgive yourself, correct the mistake if
possible and vow to do better going forward. (For more, read Get Your Budget In
Fighting Shape.)

A budget should evolve as your circumstances change. Don't expect the budget you made
at 25 to still work for you at 35 or even 27. Your income and expenses will change over
time, often annually. For example, if you get a raise, you'll want to adjust your budget to
reflect how you want to spend or save the extra money.

43

As long as you're spending within your means each month, a budget is a great tool for
helping you sleep soundly at night. You know where your money's going, you know that
you're on track to meet your financial goals and you know that you've planned to weather
the storms that will arise from time to time. If your spending is too high for your income,
a budget serves as a pesky but necessary reminder that you need to change things - and
the sooner you listen to those irksome numbers, the better off you'll be. Living paycheck
to paycheck only works temporarily - sooner or later you will have an expense you can't
meet or a goal you can't achieve if you don't learn how to budget.

Budget Recommendation
Read Governor Patrick's FY 2015 Budget Message
The Governor's budget document comprises hundreds of pages of background and
supporting materials, including:

The Governor's program budget recommendation in the new program budget

dashboard as well as the traditional line item dashboard

In-depth policy documents describing many of the Patrick Administrations priorities and

reform proposals

A description of the operating budget process and the critical factors that impact

the development of the FY 2015 Budget

The User Guide provides background information on the Massachusetts state budget and

a description of all documents and sections included in the FY 2015 Governors Budget
Recommendation.

The Navigational Guide provides users with information on how to locate and navigate

through the online version of the budget. It describes how users can find information that is
important to them using various searching parameters and drilldown links.

44

If you have any questions or need additional information, please contact us.

Suggestions for Budget

PETALING JAYA: The rakyat have been invited to submit their ideas and suggestions for
Budget 2015 on a purpose-designed microsite.
The public can share their ideas on how to further improve 16 categories affecting the
nation, such as education, cost of living, urban housing, healthcare and others.
The public can also vote on ideas presented by other participants and share links to the
microsite on social media.

As of Wednesday, the Prime Minister's Office has received over 4,000 ideas from the
public and are looking for more before the Aug 24 closing date.
Prime Minister Datuk Seri Najib Razak said in his blog that he had been motivated by the
response received for Budget 2014 and was looking forward to suggestions for the
upcoming budget.
"To achieve our Vision 2020, we need a fiscally responsible budget that takes account of
the rakyat's needs.
"I believe that with your help, the 2015 budget will continue to spur growth, improve
fiscal position and raise living standards for the rakyat," he said.

45

BIBLIOGRAPHY & REFERENCES

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Blndal, J. (1997a) Modern Budgeting. Paris: OECD
- ed. (1997b) 'Budgeting for the Future.' Paris: OECD Working Paper No. 95.
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(2003a) 'Budget Reform in OECD Member Countries: Common Trends.' OECD

Journal on Budgeting. 2:4 7-25

-

(2003b) 'Accrual Accounting and Budgeting: Key Issues and Recent

Developments.' OECD Journal on Budgeting. 3:1 43-59

Bromwich, M. and Lapsley, I. (1997) 'Decentralisation and Management Accounting in
Central Government: Recycling Old Ideas?' Financial Accountability and
Management 13: 2 181-201

46

Buschor, E. and Schedler, K. eds. (1994) Perspectives on Performance Measurement and

Public Sector Accounting. (The Fourth Biennial CIGAR Conference) Berne, Stuttgart,
Vienna: Haupt.
Chan, J. L. (1994) 'Accounting and Financial Management Reform in the United States
Government: An Application of Professor Lder's Contingency Model.'
in Buschor and Schedler
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(2002a) 'Introduction.' OECD Journal on Budgeting. Vol. 2 Supplement 1 9-10

(2002b) 'Comparative International Government Accounting Research (CIGAR)

Methodology: Issues and Strategies.' in Montesinos and Vela.

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(2003) 'Government Accounting: An Assessment of Theory, Purposes and

Standards.' Public Money & Management. 23:1 13-20.

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The weblography from which we have collected information are:-

www.google.com
www.askme.com
www.wikipedia.com
www.wikiaskme.com
www.shareslied.com
o www.scribd.com
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