Question

in 200 words How does budgeting household expenses differ from budgeting business expenses? What are the similarities?

Answer 1

Budgeting is very important element of every business, it is equally important in house also.

We can see the difference between budgeting household expenses and budgeting business expenses:

• A household budget includes the household expenditures while a business budget includes the business expenditures.
• Household expenditures include food expenses, rent of house, vehicle expenses, school fee, entertainment expenses, electricity and water bills etc.
• Business expenditures include direct material, labor, overheads, selling and administrative and distribution expenditures.
• Household budget is based on the salary or other income while business budget is based on sales/revenue of business.
• People cannot write off their food expenses or capital expenditures while business can do so.

Similarities- Are as following:

1. Both household and business make budget every year on the basis of forecast or anticipation.
2. Both have the equal importance of budget in their day to day life.
3. Budget gives household as well as business to control the cost and expenditures so that savings may increase.
4. Motive of budget is same for household and business that is to control the expenditures and increase returns.