What is budgeting and how does it relate to costing?
A budget is a financial planning that consists of estimating income and expenses over a given period. It is an essential tool for organizing available resources in order to achieve specific goals, whether personal, professional or educational. As a Tunisian and a teacher, I can illustrate this with my experience in managing school projects or on Steemit, where I have to establish a precise budget to allocate funds to educational activities, such as organizing courses or competitions.
The relationship between budget and costs is direct and inseparable because costs represent the expenditures necessary to achieve a given objective and the budget serves to forecast these costs in order to ensure that the available resources are used efficiently, for example, to launch a new educational activity, it is essential to identify the planned expenses (such as school supplies or digital tools) and to integrate them into a clear budget to avoid financial excesses.
Finally, the budget provides a global and organized view of finances, allowing better control of costs while ensuring that each expense contributes to achieving objectives, if I were to organize an educational competition on Steemit, for example, I could establish a precise budget to cover the rewards of the participants and possible promotion costs, while ensuring that the funds are managed responsibly.
Exemple : Budget for Organizing an Educational Competition on Steemit
To clearly illustrate the budgeting process for an educational competition, I will present the details in a table, followed by a description of each item and the forecasting adjustment for potential cost increases.
| Expense Item | Details | Estimated Cost (STEEM) |
|---|---|---|
| Rewards for Participants | 10 participants × 15 STEEM | 150 |
| Promotion Costs | Social media ads | 50 |
| Miscellaneous Expenses | Banners, graphic design, etc. | 20 |
| Total Estimated Cost | 220 | |
| Forecasted Adjustment (5%) | Potential increase in expenses | 231 |
The main expense in this educational competition on Steemit is on participant rewards, with ten expected winners, each receiving a reward of 15 STEEM, this category represents a total of 150 STEEM, the largest share of the budget, I anticipate that this allowance is essential for motivating participants and maintaining a high level of quality in their contributions.
Promotion costs are another crucial part of the budget, valued at 50 STEEM these funds will be used to finance social network advertisements and ensure maximum visibility of the event which will attract more participants and make the competition known to a wider audience thus guaranteeing its success.
Finally, a sum of 20 STEEM is reserved for miscellaneous expenses, such as the creation of banners, graphic design or other unforeseen needs that may arise during the preparation or implementation of the event, in order to anticipate any increase potential costs, an adjustment margin of 5% was applied, bringing the total budget to 231 STEEM.
Explain the importance of budgeting in determining costs.
The importance of the budget in determining costs lies in its ability to structure and anticipate the expenses necessary to complete a task or project because it helps identify exact financial needs, evaluate available resources and prevent financial risks such as budget overruns. As a teacher, I often use a budget to organize educational projects or online training courses, which allows me to forecast costs and better manage funds.
The budget also plays a key role in controlling costs by providing a clear limit on possible expenses, for example, when I run a workshop on a platform like Steemit, I set a maximum amount for each expense, which helps me to avoid excesses, moreover, by having a precise estimate of costs, I can prioritize important expenses and adjust those that are less essential, thus guaranteeing optimal use of resources.
Finally, a well-structured budget promotes transparency and informed decision-making, especially in collaborative contexts where several stakeholders are involved, this applies as much in an educational setting as in community management, and for example, when I manage a collaborative project with my colleagues, I share the detailed budget to establish a common understanding of financial expectations which guarantees not only effective coordination, but also shared responsibility through rigorous monitoring of expenses and appropriate adjustments.
Prepare the budget as explained, for the preparation of cakes. Consider a 4% adjustment.
Preparing a budget for making cakes begins with identifying the ingredients and their costs, let's take as a basis: 2 kg of flour at 5 dinars, 1 kg of sugar at 3 dinars, 500 g of butter at 8 dinars , 12 eggs at 6 dinars, 1 sachet of vanilla at 2 dinars and 200 g of chocolate for decoration at 4 dinars, thus the initial budget for these ingredients amounts to a total of 28 dinars.
Taking into account an increase of 4%, it is necessary to adjust the initial budget to reflect this variation, for this, we multiply the initial total by 1.04, which gives an adjusted budget of 29.12 dinars, this increase can be due to an increase in ingredient prices or the need to purchase higher quality ingredients, showing the importance of having a flexible budget that is adaptable to these adjustments.
Prepare the budget as explained, for the hairdressing service. Consider a 3% adjustment.
To prepare a budget for a hairdressing service you must first identify the main expenses: shampoo and hair care for 10 dinars, hairdressing products for 15 dinars, labor or cost of service for 20 dinars and electricity or other operating expenses for 5 dinars, this gives a total initial budget of 50 dinars.
With a planned increase of 3%, the budget must be adjusted accordingly, by multiplying the initial budget by 1.03, the new total rises to 51.5 dinars, this slight increase could be due to improvements in the products used or to a increase in service costs, reflecting the need to build in margins to absorb such changes.
Best Regards,
@kouba01