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Companies have budgets because they are necessary, and because they do work. Why should it be different for, say, a family of five? Budgets are a way of commun
by manmal 4y ago
Companies have budgets because they are necessary, and because they do work. Why should it be different for, say, a family of five?
Budgets are a way of communicating the availability of funds. They give insights into spendings. And they don’t have to be treated as being set in stone - my family has not yet had a month where no budget was exceeded, and, still, budgeting helped tremendously by reducing spending and giving confidence that we can make do with the current income.
Saying that budgets are made to self-restrict is a weird argument - self restriction is indeed necessary. Or should I go and buy a Porsche with my retirement fund? I think that wouldn’t be wise.
EDITED to elaborate on the points I‘m making.
- mulmen 4y ago> Companies have budgets because they are necessary, and because they do work. Why should it be different for, say, a family of five? Because a family isn’t a company. A budget may be good for a family but not because it’s good for a company. They may both benefit but that’s coincidental.
- manmal 4y agoIn my experience, there are similarities that are relevant: - Funds can be withdrawn by multiple parties, necessitating a shared understanding of fund availability - Funds are limited to a somewhat (but not perfectly) predictable amount - Cashflow should be monitored to avoid overdraw - Money is spent on a multitude of necessities, and a compromise for allocation must be found that is acknowledged by all parties involved
- mulmen 4y agoI don’t think it’s worth squinting so hard. The differences are so great you’d be better off looking to similar families instead of a completely different class of social construct. Most importantly the remedies are different. When cash is tight a company can lay off workers. You can’t do that with your kids.
- manmal 4y agoFair enough, I agree with you there. BTW I recently learned that my great-great-grandmother „laid off“ (sent to an orphanage) two of her children after her husband was killed. It was a grueling experience for the children, according to their descendants. Fortunately this is not how humans are treated anymore, in most areas of the world.
- PaulDavisThe1st 4y agoI think the TFA's point is that whatever the merits of budgeting itself, it will not bring about the goals it is frequently associated with. The author explicitly compares it with dieting, which may have its own virtue, and may even temporarily result in goal attainment, but has a long term record of failing to bring about the desired changes. Also, the budgeting referred to in the article may be similar to handling questions like "should i go buy a Porsche with my retirement fund", but is absolutely not the same.
- manmal 4y agoRe dieting doesn’t work - temporary calorie restriction is often beneficial. It really depends on how it is done, eg IF, water fasting, and fasting-mimicking diet have been documented to yield interesting results. I’m not a fan of such blanket claims, they are not conducive to learning.
- Apocryphon 4y agoIt doesn't work in that often dieting without long-term changes just lead to weight being gained back in short order.
- manmal 4y agoI tend to agree when it's phrased like that.
- dubswithus 4y agoMaybe the argument is that budgeting doesn’t work for the author because she is just _that_ poor. I guess I could see deprivation being kind of severe.
- deleted 4y ago[deleted]
- BeetleB 4y ago> Companies have budgets because they are necessary, and because they do work. This is a joke, right? Have you seen how companies do things? Have you not heard of projects going over budget being the norm? I work in a large, successful company. The only budget they reasonably stick to is compensation. Otherwise, it's quite common for projects to exceed budgets. The company accepts this because: 1. There is a large buffer between expenses and revenue. 2. Someone will always convince leadership that the extra increase in revenue will offset the budget excess (obviously not always true). 3. They cut back on other projects and people. Think of the equivalent in a family ("Sorry Johnny, no dinner for you because Timmy wanted a new IPad, and we all know he's the smart one who'll make more for himself than you will." 4. (Edit) And oh, companies take on debt all the time, and don't pay a heavy price for it.
- Apocryphon 4y agoNot to mention, companies can issue corporate bonds and do all sorts of things that families can’t.
- manmal 4y agoFamilies can get interest free loans from relatives, mortgage their home etc.
- BeetleB 4y ago> mortgage their home The one they don't have? > Families can get interest free loans from relatives Some can, some can't. I'd wager it's a lot easier for companies to get loans than poor families.
- manmal 4y agoI agree. The same applies to companies, not every company’s bonds would sell, and not every company could get a loan.
- deleted 4y ago[deleted]