Write about your approach to budgeting.

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A couple faced financial strains post-marriage, leading to poor budgeting and increased pressures. They realized the importance of systematic budgeting to manage their income and expenses effectively. After creating a monthly budget, they prioritized savings and essential expenditures. Over time, adherence to this budget improved their financial situation, enabling them to prepare for a family. Ultimately, disciplined financial planning became vital for their future stability and well-being.

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He worked in a corporate office. The wages were moderate according to his job profile and experience. Once on the job, he was persuaded by his family members to marry. He did not want to get married as he wanted to acquire more experience and improve his job profile to get a better placement to lead a better life. He was mentally not prepared to take up the issue of marriage.

After persistent pursuance and pressure from family, he reluctantly gave up and consented to his marriage. Preparations were started, but most of the expenditure was to be borne by him. Incapable of doing that, he applied for an official loan, knowing well that it would be a heavy burden on him.

He was now a married man. He had no proper place to live with his wife in the city he was working. He started searching for a house. After much effort, he managed to get one. After the formalities were over, he occupied that house as a tenant. The rent was a burden but it was to be done. After some time, his wife came to him.

His wife was educated but was not working. The couple conversed with each other and decided that though financial constraints were present, both could not work properly. He proposed that if she so wished, she take up a job, and he would take care of the house. He would take up a petty part-time job if needed.

After much deliberations, both arrived at a consensus that he should continue with his job, and she would stay at home, looking after domestic affairs, and if need be, she would take up other light work. She was a proficient craftsperson. She proposed that she could continue working towards honing her skills and earning money by starting a start-up.

Both agreed and things started working. His wife was a simple and kind-hearted woman who knew how to manage things well. He was not well adapted. With mutual cooperation and trust things started running on rails.

Time started rolling. Things were working as expected, but after some time, things started jerking. The perceived smooth ride was becoming bumpy. The commotion started rearing its head.

The couple was sensible, they did not want any tiff among each other. They sat and started thinking about the problem to get a permanent solution. They found that they were not adhering to norms and their way of expenditure was haphazard. Once again, they reached a consensus of making a monthly budget. It was not a new thing for them. They knew well how a systematic account of income and expenditure could help them come out of the situation they were in.

The couple knew the importance of budgeting. Being educated and aware of national and international affairs, the term budget was well known to them. Once in conversation, they had discussed about each other.

Etymologically, the word Budget has a root in the old French word Bougett. The word means a leather bag. The British Chancellor would put papers related to the income and expenditure to show before the Parliament. Now, the budget is an established word widely used for an account of earnings from all sources and expenditures. It has a provision for future plans and new schemes. Planning and budgeting are the two important aspects of financial discipline.

Household budget-making involves almost the same process except for its size.

An account of income is first prepared considering every possible means of income. The source Of income can be recurring or non-recurring. It should include interest earning, wages and any other means. In families which are solely dependent upon wages, it is only that which is to be considered.

After having an account of income, expenditures are taken into account. The expenditures are mainly permanent, occasional or exigent type. Before accounting for expenditure, some amount needs to be stashed away for saving. This can ideally be ten per cent of the income. It can vary according to the exigency of the occasion.

The remaining money can be considered for expenditure. Priority has to be given to the permanent expenditure. It can have expenditure on ration, education fee of children, rent, bills like telephone, electricity, gas, petrol et cetera. Some contingent provisions in the budget should also be considered.

While considering contingency, special provisions need to be made while preparing a domestic budget. The contingent situation can be a sudden medical emergency or any other emergent situation. Adhering to this type of budgeting on the home front will pose difficulty initially time, but with time, it becomes a routine and helps manage the difficult situation.

The government, nevertheless, prepares its budget on a large scale. Every possible means of income, including tax and non-tax income, levies, and interest, are accumulated to form a consolidated fund. The income from tax is, thus, called tax revenue. The taxes are of different types. Though the list of taxes named below is not comprehensive, some of the important ones are as follows:

• Income Tax
• Gift Tax
• Wealth Tax
• Corporate Tax
• Goods and Services Tax
• Excise duty
• Custom duty
• Capital Gain Tax

Every type of revenue is collected in the consolidated fund which gives an account of money the country has.

The expenditure in government budget is mainly of two types.

• Revenue Expenditure – It is a type of expenditure which is used in day-to-day expenses like salary disbursement to the employees, repairs and utilities.
• Capital Expenditure – It is a type of expenditure that is used in creating assets, building construction and buying long-term assets.

The funds collected from tax and non-tax revenue are shared among the states of the union.

Budgets are allocated for every sector of the government according to demand and necessity. The amount of budget allocation indicates the importance and priority of government. Defense, Railway, Health and Family Welfare, Surface Transport, and Human Resource Development are the key sectors that need money. The increasing demand of a technology-driven economy demands more allocation. It is considered

The government has to carry out various functions and run welfare schemes. The schemes are run by ministries. Ministries get fund allocation. They use the money and when they need more, it can be reappropriated from different heads of the same ministry. The contingent fund can be allocated from the fund of the same name to meet the fortuitous expenses. The unused money has to be surrendered back to the Finance ministry at the end of the year.

As has been said above, the government is run by the money collected by people as taxes. It is, thus, essential to have an account of receipt and expenditure. It has to have the approval of the public which it gets by the parliament. The budget is presented in the form of a Money Bill for discussion and approval by both houses of Parliament. After getting the President’s consent, it becomes law. The government then does this according to the provisions of the law.

The central player of this discussion, the couple, started making a budget. Initially, they faced difficulty, nay, tough time in sticking to their budget routine, but as time passed, they became used to it. Gradually, they found that they had a stronghold of their expenditure vis a vis their income. They were now capable of meeting exigencies or the contingent situation. They could manage the affairs effectively. It was the time when they started thinking about starting a family.

Systematic and planned work and its implementation give wonderful results. This underscores the importance of discipline and a regulated way of doing a thing. Financial planning is necessary for a better future. Though the future is unseen it can be made better if proper planning is done today. Human life is a sum of struggle, strife, suffering, happiness and joy. It has to be lived and faced as it comes.

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