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Occasionally, if you must pamper yourselves, you may start by looking out for those colourful brochures in your mailbox, offering many mouth-watering deals from the latest fast food joints in town, or a few dollars off that irresistible pizza. While these savings may be insignificant, cumulatively it can make a big difference to those on a tight budget, freeing up those dollars for other purposes.
A family budget is an indispensable housekeeping tool. Have you ever wondered how your parents manage to put money into your pocket every day for you to spend at school? They work to make a living and that is the source of family income. A family that is financially sound budgets carefully to spend sensibly so that it can save optimally. Your parents have to pay for daily groceries, monthly utilities, scheduled home loans, petrol for the family car as and when the need arises, just to name a few.
The breadwinner in your family has the responsibility to keep the family going so that in today’s context, a reasonable standard of living can be maintained and sustained over time. The income of your parent(s) pays for the expenditure of the family. Savings can only happen if the household expenditure is smaller than the family income and it is a necessity to do so.
If there is no savings, how can unplanned or emergency needs be met? Living standards can be compromised if there is not enough money to go around but if the sick needs to get to a hospital, then there is no way to put off such a need to do so. As such, it is always good to save whenever possible, through ways like careful spending on necessities by comparing prices of goods and services, buying essentials in bulk whenever feasible, using electricity and water at home wisely, eating in more often than dining out, using debit card instead of credit card and paying off any loan or hire purchase instalment punctually to avoid incurring any interest penalty.
Needless to say, it is absolutely imprudent to overspend and go into debt, as interest rate payment more often than not obliterates savings made elsewhere. It pays to be reminded that sustaining a desirable standard of living is one thing, while attempting to keep up with the Joneses is quite another. Living within one’s means is a maxim that is also applicable to the family.
How do schools budget and save? A school, like any other organisations, needs to plan how it spends its funds effectively so that it gets the best value for its staff members and students. So every activity the school plans, ranging from enrichment programmes to concerts for fundraising, needs to be evaluated, weighing its positive effects against the negative, and working towards making each and every dollar count. Here, cost savings are not as important to the school as it is to the student, given that each dollar must be expended to give the child the best in facilities and teaching materials. But when savings do occur, these are channelled into funds that would grant additional services such as
overseas learning journeys or surprise concerts (which may otherwise never have happened), improving the quality of education and benefitting both teachers and students in the long run.
In this larger scale of financial planning, specialised people called auditors are called in to monitor and supervise how the school authorities make use of funds to conduct various activities. They would often dispense advice and recommendations to help schools make financially sound judgements in order to avoid cost overruns. This is especially important, as we move on to the largest and the most important party in this discussion: the state.
The government of any country is the most important player that needs to save and make financially sound decisions, and we can take a leaf out of our government’s book to see how it appropriates money for all its ministries, ploughing any savings back into our reserves year after year. Basically the economy of a country is made up of a few components, namely consumption, investment, public expenditure and our trade with other countries.
The Singapore government conducts its economic policies based on how much to allocate for spending, investment and other purposes which ensures the smooth running of the country, ever mindful of the need to monitor and manage the annual inflow and outflow of funds. After the various ministries have submitted their respective proposals to seek approval for the following year’s funding requests, deliberations will follow as fine-tuning must be made to the original proposals until the final approval is granted. The Ministry of Finance (MOF) then comes up with an annual Budget to declare how these funds are to be used to the general public. This is an example of budgeting on the national scale.
The low level of corruption in Singapore ensures that governmental funds will go where they are supposed to, and make a positive difference in the target sectors, instead of being pocketed illegally by anybody, which can cause harm to the sound and careful financial planning undertaken and create many problems as evidenced in the mismanagement of public funds reported in other countries worldwide. Endemic corruption destroys public confidence in the government, leading to a rise in undesirable economic and social problems that will cost more to the taxpayers, as compared to a government that clamps down hard on corruption.
Indeed, the inextricable concepts of budgeting and saving have been and are paramount to the economic success of Singapore, casting its impact on everybody from the individual to the state. Prudent financial management is pivotal in the continual success of our people in sustaining a desirable standard of living, and our country in striving to maintain its position as a useful and relevant key global partner to the rest of the world.