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What is the disadvantages of fixed budget?

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What is the disadvantages of fixed budget?
posted Jun 15, 2017 by Naveen Kumar

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Disadvantage of Fixed Budget

A fixed budget is one that is drafted on the basis of specific criteria without any provision for any changes at any point during the period of time covered by the budget. The budget lets those involved know how much they have to spend during a given time frame, regardless of any eventualities such as a slump in sales or increased profits.

Disadvantage of Fixed Budget

One problem with static budgeting is that it does not account for life's unpredictable events. While fixed bills, such as mortgages or car payments, are easy to predict, variable expenses are unpredictable. As a result, exceeding your budget will cause stress. Static budgets also are not an accurate way to track expenses. In fact, all they do is provide a basic guideline that will be difficult to follow, should your income or expenses change.

answer Jun 15, 2017 by Deepak Jangid
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