N6 – Module 6 Introduction
Te word budget comes from Middle English, bouget, meaning wallet; from Old French bougette, bouge meaning leather bag (Reader’s Digest Universal Dictionary); in England the term was once used to describe the bag in which the Chancellor of the Exchequer carried the document outlining the government’s needs for revenue in order to provide services. It is impossible for any person or organisation to plan for the future without knowing how much money they have available to spend. A budget is simply a financial statement containing estimates of income and expenditure (how much will be earned, and how much will be spent) within a time period.
Let there be work, bread, water and salt for all. President Nelson Mandela, South African Statesman, 1918-2013.
A country is nothing more than a very large organisation. No person can walk into a supermarket to buy food without knowing what they need, how much they have spent already that month, and how much they have leſt. In the same way, no country can simply build seven new dams, employ 4000 new teachers and reduce income tax by 20% just because the people want them to; the government has to carefully estimate its income and expenditure.
Just as a budget is a practical guide to financial control, it is also a political statement. A family deciding to spend more money on a holiday than on fixing their home one year have made a “political” decision in the sense that it reflects policy, an attitude, a world-view and an approach to life itself. Just so, a budget reflects the political aspirations of the government of the day. What is your approach to your life, from a financial point of view?
Characteristics of a Budget
Activity Draw up your own budget by filling in the table below – fill in whichever applies to you:
Item
Accommodation Food Transport Stationery Study fees Books Entertainment Other TOTAL: Income: Balance – plus or minus:
Amount in Rs/year Amount per month
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