RRL

BUDGETING
According to Lauren Schwahn (2023), she defined budgeting as a spending plan
based on income and expenses, additionally, it’s an estimateion of what amount of
money you’ll make and spend over a certain period of time. The idea of it is to make
your money as personalized as possible.
Schwahn emphasizes the 4 significance of budgeting in leading someone to its
financial goals, people who are practicing budgeting is able to (1) Understand the
relationship of money, (2) Save for the future, (3) Get or Stay out of Debt and it even (4)
Relieve Stress. However, in the study of Akhilesh Ganti (2023) "What is a Budget?" He
then stated that budgeting is the estimation of revenue and expenses over a specified
future period of time that is re-evaluated on a periodic basis.

WHY BUDGETING IS PART OF FINANCIAL LITERACY?

"Do not save what is left after spending, instead, spend what is left after saving"
Warren Buffet. The University of Wyoming Extension supports the idea of budgeting as
part of Financial Literacy on their study of "Budgeting, The Importance of Keeping Track
Of Your Money". According to them, it is a concrete foundation of transforming a wiser
consumer and financially educated.
Budgeting is a method of harnessing someone's priorities and money. The other
can view the outcome of their actions through numbers, if all spending is recorded and
analyzed. The key to start a budget is the desire and willingness to use it. It is useless
to create and fill in a budget if you do not use nor follow it. In addition, the College of
Southern Maryland highlighted the fact where a proactive way of managing finances is
by doing a budget. Since it ensures that you have more money to come than going out
by keeping track of income and expenses. This enables to budget for living
expenditures, purchasing the items that are crucial, and make plans for both short and
long-term objectives. And since Financial Literacy is the idea on how to make wise
decisions with money that includes knowing how much to save, decide favorable loan
terms, understanding impacts to credit, distinguising various methods for retirement and
of course, the preparation of budget, this shows the inclusion and significance of it in the
scope of Financial Literacy.

PROBLEMS
Behind all the positive impacts or effects of budgeting in a business or in a
particular organization, still there's some budgeting problems companies are facing.
Insight Software identified the 8 problems of budgeting, such as Time, it took most
companies a lot of time to coordinate, consolidate and compile. Next is the problem in
communication, since every stage is composed of different personnel that requires
inputs such as from budget creators, approvers and contributors sometimes there is no
alignment with every department and does not meet the end goal. Followed by
Complexity, Flexibility and Accuracy, since many get lost in the details and struggle with
providing accurate responses due to different composition of minds and decisions.
Optimization since some companies has technology restrictions and manual labor that
requires the merging the actuals and budgets. Lastly, the Cost and Value. In short, bad
budgeting can lead to undesirable negative long-term financial impacts and problems in
reaching organizational goals and objectives.

RECORD KEEPING
Accounting treat Recording Keeping as an essential tool in a business in order to
monitor and see if the business is really on its right track or running smoothly. In
practical world of businesses even in the small ones, Record Keeping is the keeping of
clear records of revenues income, expenses, employees, tax documents and accounts.
Cambridge Dictionary defines it as the activity of organizing and storing all the
documents, files, invoices and more that is related to a company’s or organizational
activities.
There’s a lot of benefits when a business do record keeping, some of its
significance is that, it Monitors the progress of a business, Prepare your financial
statements, Identify sources of your income, Keep track of your deductible expenses,
Keep track of your basis in property, Prepare your tax returns and Support items
reported on your tax returns.
WHY IS RECORD KEEPING PART OF FINANCIAL LITERACY
According to Sujaini (2023) on his study of “Financial Literacy” he defined it as the
capacity to understand and effectively utilize different financial abilities, such as financial
management, budgeting, and saving. Individuals that are financially literate become
self-sufficient, allowing them to achieve financial stability. Recordkeeping requires a
personnel or an accountant a ton of knowledge when it comes to finance, it’s a crucial to
the progress of an entity. Standard recordkeeping helps a business minimize losses and
maximize income, manage cash effectively and efficiently and it even improve financial
analytics. Since the recording allows not just manual or physical but also electronics,
there is a need to access records both contracts and other legal documents, private
customer and business details. Being literate financially and keeping of records, will be
able to understand how much money you have, where the money is coming from and
where the money needs to go. That is why it is essential and must be part of financial
literacy
PROBLEM
In the study of Haisam Malak (2023) “9 Records Management Challenges and
How to Overcome Them” he stated that some of the major records management
challenges are information overload, data accuracy and integrity, maintaining
compliance with the regulations, managing records across multiple locations, poor
records retrieval and missing retention schedule. In addition, Kayman Reshma (2022),
listed some of the risks or problems of Poor Record Keeping such as the Improper
Utilization of Time and Space, Disrupted Flow of Information, Risk of Losing Customers
Trust and Loss Of Reputation, Loss of Knowledge and Mishandling Information and
lastly, Missing to Meeting Compliance. If it is not done right, the losses would be tragic
and irreparable and most of all it could lose the confidence of customers and it could
eve lead to shut down of businesses or an organization.
 REFERENCES

Ritchie, A. (2023). "Financial Literacy". https://www.annuity.org/financial-literacy/

Sujaini, S. (2023). "Understanding Financial Literacy".
https://cleartax.in/g/terms/financial-literacy
EducationLeaves (2022). "Budgeting: Budgetary Control, Advantages and Limitations of
Budgeting". Retrieved from: https://youtu.be/INnPo0QPXf4
Vigil et. al. (2023). "UW Financial Literacy: Budgeting, The Importance of Keeping Track
of Your Money". https://www.uwyo.edu/uwe/programs/money/spending/budgeting.html
Anania, K. (2022). "Common Budgeting Challenges to Overcome".
https://www.investopedia.com/personal-finance/common-budgeting-challenges-
overcome/
Business Queensland. (2023) "Understanding Financial Record Keeping".
https://www.business.qld.gov.au/running-business/finance/essentials/record-
keeping#:~:text=Record%20keeping%20is%20how%20you,private%20customer
%20and%20business%20details.
College of Southern Maryland (2023). "Finacial Literacy and Budgeting".
https://www.csmd.edu/costs-aid/financial-literacy/index.html#:~:text=Budgeting%20is
%20a%20proactive%20approach,%2D%20and%20long%2Dterm%20goals.
Reshma, K. (2022). "5 RISK OF POOR RECORD KEEPING".
https://www.linkedin.com/pulse/5-risks-poor-record-keeping-kayman-reshma
Tallman, R. (2023). "Dangers of Inadequate Record-Keeping".
https://www.cqnetwork.com/dangers-of-inadequate-record-keeping/
Srivastav, A.K. (2023). "Record Keeping".
https://www.wallstreetmojo.com/recordkeeping/