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Essential background financial skills for budgeting
What is the relationship between Cost, Value, Cash and Risk? How do we account for income and costs? How does this differ from cash flow? What do I need to understand about costs and cost behaviour? These questions are addressed in this chapter.
Cheaper is not always better: cost and value in budgeting
Oscar Wilde said: ‘A cynic is a man who knows the price of everything and the value of nothing.’ To build and manage budgets you need to know (or understand) the cost and value of everything.
When we make our own purchasing decisions for a personal expenditure, whether we are purchasing clothes, food or entertainment, we usually base them on both cost and value.
Some of our purchases we ...
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