Last updated on Nov 27, 2023
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Dynamic budgeting
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Zero-based budgeting
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Participatory budgeting
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Digital budgeting
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Social budgeting
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Scenario budgeting
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Here’s what else to consider
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Budgeting is a crucial skill for managing your finances, achieving your goals, and planning for the future. However, budgeting is not a static or one-size-fits-all process. It evolves with changing needs, preferences, and technologies. In this article, we will explore some of the emerging trends and innovations in budgeting that can help you improve your financial wellness and performance.
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- Chris Claflin I Help Couples Find Financial Peace Through 1-on-1 Coaching 3
- Hanan Hasbullah Lead Accountant @ Coreo Real Estate | Financial Analysis 1
- Omid Arjmand Nejadian Project Planner, Budget and Cost Controller 1
1 Dynamic budgeting
Traditional budgeting methods often rely on fixed assumptions, projections, and targets that may not reflect the reality of changing circ*mstances, opportunities, and risks. Dynamic budgeting is a more flexible and responsive approach that allows you to adjust your budget as you go, based on actual results, feedback, and data. Dynamic budgeting can help you adapt to changing market conditions, customer demands, and operational challenges, as well as leverage new opportunities and innovations. Dynamic budgeting can also help you avoid budget variances, inefficiencies, and waste.
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- Chris Claflin I Help Couples Find Financial Peace Through 1-on-1 Coaching
Dynamic budgeting is the only real budgeting. If you aren’t using new information to update your budget, then you’re a slave to your budget. We are the creator. The budget is our creation. Not the other way around. We’re dynamic. Our budgets must be too, if they’re to serve us properly.
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- Jonathan E. Smith Technology Alignment Manager at IT Proactive
I often get asked "how do we plan for that?" or "What if?!" My answer is always the same. You don't know what you don't know. So get to it. Don't accept verbal answers or notes from an old report. We often are glad just to have an answer at all. But is it the right one? The "right tools" for effective budgeting is simply: the right answers. Current, accurate data. Investigate. Is your Quickbooks file from last week still valid? No. Because, you know why. Right? If not, you should. You should know. Get the data, then figure out another way to get the same data and compare it. How far do the data points differ? A tad? Okay. A ton? What... why? Fill in the why's. Get that data and stay on it. With this tool sharp, you can plan effectively.
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- Omid Arjmand Nejadian Project Planner, Budget and Cost Controller
It`s true to have a Dynamic budgeting, but without a primary baseline, your budgeting will not track itself to compare. it`s necessary to have a basic baseline and after that you can correct it to have a dynamic budget. By this way you can realize your estimation accuracy.
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2 Zero-based budgeting
Zero-based budgeting is a method that requires you to justify every expense and allocate resources based on your current needs and priorities, rather than on historical or incremental bases. Zero-based budgeting can help you eliminate unnecessary or outdated costs, optimize your spending, and align your budget with your strategic goals and values. Zero-based budgeting can also help you foster a culture of accountability, transparency, and innovation in your organization or personal finances.
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- Hanan Hasbullah Lead Accountant @ Coreo Real Estate | Financial Analysis
Zero-Based Budgeting (ZBB) is like hitting the financial reset button. Unlike traditional budgets that start with last year's figures, ZBB begins from scratch. Imagine our company decides to implement ZBB for the marketing department. Instead of basing the budget on the previous year's spend, every expense, from advertising to salaries, is justified and allocated based on current needs and priorities. It's a method that promotes efficiency and cost control.
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3 Participatory budgeting
Participatory budgeting is a process that involves engaging and empowering stakeholders in the budgeting process, such as employees, customers, or community members. Participatory budgeting can help you increase the ownership, involvement, and satisfaction of your stakeholders, as well as improve the quality, relevance, and impact of your budget decisions. Participatory budgeting can also help you foster a culture of collaboration, diversity, and democracy in your organization or personal finances.
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- Omid Arjmand Nejadian Project Planner, Budget and Cost Controller
You should have at least general sight to your organization processes of work and realizing of how every job done briefly to trim the activities. In other words you better be familiar with process methods.
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4 Digital budgeting
Digital budgeting is the use of technology to facilitate and enhance the budgeting process, such as software, apps, tools, or platforms. Digital budgeting can help you automate, simplify, and streamline your budgeting tasks, such as data collection, analysis, reporting, monitoring, and evaluation. Digital budgeting can also help you access real-time information, insights, and feedback, as well as customize and personalize your budgeting experience.
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- Hanan Hasbullah Lead Accountant @ Coreo Real Estate | Financial Analysis
It involves using digital tools and software to streamline the budgeting process. For instance, instead of manually entering expenses on paper, we can use budgeting apps that sync with our bank accounts, categorize spending, and generate real-time reports. It's like having a financial assistant at our fingertips, simplifying budget management.
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- Omid Arjmand Nejadian Project Planner, Budget and Cost Controller
It can be said that nowadays budgeting is impossible without using software. You can feel this need especially when you are facing a project. Even using a simple spreadsheet, you may not be able to complete the budgeting of a project, and this is where the need for a budgeting specific software or project management software plays its role.
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Technology allows teams to spend more time in analyzing the numbers than building them. Also, you can easily build different scenarios.
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5 Social budgeting
Social budgeting is the integration of social and environmental factors into the budgeting process, such as sustainability, ethics, impact, or values. Social budgeting can help you align your budget with your social and environmental goals and responsibilities, as well as enhance your reputation, trust, and loyalty among your stakeholders. Social budgeting can also help you contribute to positive social and environmental change in your organization or personal finances.
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6 Scenario budgeting
Scenario budgeting is the development and comparison of different budget scenarios based on various assumptions, variables, and outcomes. Scenario budgeting can help you anticipate and prepare for different future possibilities, as well as test and evaluate the feasibility and implications of your budget choices. Scenario budgeting can also help you improve your decision-making, risk management, and contingency planning in your organization or personal finances.
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- Hanan Hasbullah Lead Accountant @ Coreo Real Estate | Financial Analysis
Scenario budgeting is like playing out 'what-if' scenarios for our finances. Instead of relying on a single budget, we create multiple budget scenarios based on different assumptions. For example, in a scenario budget, we might plan for both a best-case and worst-case economic outlook.
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7 Here’s what else to consider
This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?
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As an expert and enthusiast, I have access to a wide range of information and can provide insights on various topics. While I don't have personal experiences or opinions, I can provide information based on the search results I have access to. Here's what I found related to the concepts mentioned in the article:
Dynamic Budgeting:
Dynamic budgeting is a flexible and responsive approach to budgeting that allows for adjustments based on actual results, feedback, and data. It enables individuals or organizations to adapt to changing circ*mstances, market conditions, and operational challenges. By leveraging new opportunities and innovations, dynamic budgeting can help avoid budget variances, inefficiencies, and waste [[1]].
Zero-Based Budgeting:
Zero-based budgeting is a method that requires justifying every expense and allocating resources based on current needs and priorities, rather than relying on historical or incremental bases. This approach helps eliminate unnecessary or outdated costs, optimize spending, and align the budget with strategic goals and values. Zero-based budgeting also promotes a culture of accountability, transparency, and innovation [[2]].
Participatory Budgeting:
Participatory budgeting involves engaging and empowering stakeholders, such as employees, customers, or community members, in the budgeting process. This approach increases ownership, involvement, and satisfaction among stakeholders and improves the quality, relevance, and impact of budget decisions. Participatory budgeting also fosters a culture of collaboration, diversity, and democracy [[3]].
Digital Budgeting:
Digital budgeting refers to the use of technology, such as software, apps, tools, or platforms, to facilitate and enhance the budgeting process. It automates, simplifies, and streamlines tasks like data collection, analysis, reporting, monitoring, and evaluation. Digital budgeting provides real-time information, insights, and feedback, and allows for customization and personalization of the budgeting experience [[4]].
Social Budgeting:
Social budgeting integrates social and environmental factors into the budgeting process, considering sustainability, ethics, impact, or values. It aligns the budget with social and environmental goals and responsibilities, enhances reputation, trust, and loyalty among stakeholders, and contributes to positive social and environmental change [[5]].
Scenario Budgeting:
Scenario budgeting involves developing and comparing different budget scenarios based on various assumptions, variables, and outcomes. It helps anticipate and prepare for different future possibilities, test and evaluate the feasibility and implications of budget choices, and improve decision-making, risk management, and contingency planning [[6]].
Please note that the information provided above is based on the search results available to me and may not cover all aspects of these concepts.
