As far as I know, the concept of “the budget is a target” can be explained in terms of organizational budget. An organizational budget is a target wherein it establishes limitations for how much money would be spent on one particular area of department. The budget will offer a guideline for how operations need to function so that they can stay within a maximum goal of money spent.
The budget is truly an organization's target that it sets for itself. What the management commits is eventually turned into action.
this is very easy to explain. once you are budgeting for said your monthly expense, then you are targeting of the things you are going to buy. you won't go further more if you have got what you need.
When we were in debt of over $140,000, we knew we had to budget to get out of debt. We tried put limits on spending for the various categories of expenses. However, we learned that if we spent more on paying off our debt (and now investing) than on any other category of spending we would get out of debt quick. We developed a financial pyramid where we organized our categories of spending and made sure that the debt reduction was the largest amount of spending that we did. The second greatest category of our spending was housing closely followed by all insurance including health insurance. Next came food/clothing/household items followed by utilities. You can check out how we organized and how we were able to pay off our entire debt and now being able to invest substantial sums of money and live worry free.
The budgeting was the hardest part. But once we developed our budget or financial pryamid, it was easy to stick to it and a lot of fun to watch the progress we made. Please join us.
A budget should certainly be a target for any firm, organization or an individual. It actually targets the cots or the revenue that the organization aims to reach within a stipulated period of time. Through a budget, you can easily check how much can be spent and how much is needed to get back on the planned track. In fact most large firms use budgetary control as the main means of supervision.