8860429
Description
Mind Map by lucy blackman, updated more than 1 year ago
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Created by lucy blackman
about 7 years ago
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TOPIC 1 - 1.2 Individual budgeting and
financial planning
- Budgeting refers to short-term, medium-term and long-term plans detailing
expected income and expenditure.
- The government publishes an annual Budget, which is an estimate or forecast of the income from
taxation that it expects to receive over the coming year.
- Companies estimate annual income for sales, and expenditure
on wages, raw materials and other costs which they will use to
predict whether the company is going to make a profit or a loss.
- For individuals drawing up a budget or a cash flow forecast for short term, medium term or
long-term financial plans, allows them to think of all of the things that they need or want over
different time periods and how much these will all cost.
- They can then estimate their income, wages, benefits,
gifts and allowances,over the relevant period and work
out whether that income will be enough to cover the
expenditure.
- If an individual is heading towards deficit they can n take steps, such as
reducing planned expenditure, increasing income or plan to take out
an overdraft in order to balance out the budget.
- They can then estimate their income, wages, benefits,
gifts and allowances,over the relevant period and work
out whether that income will be enough to cover the
expenditure.
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