In this blog post, I would like to talk about cost management in education. It is essential to manage money and spend it as per the need.
What are the benefits of cost management in education?
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Page Contents Story Decision and Success. Introduction to Cost Management & Its Implementation in Businesses. Why is there a Need for Cost Management in Education? Five Benefits of Cost Management in Education. The Conclusion
Let’s move forward and understand the importance of cost management with the help of a story.
Significance Of Forests
Forests are a significant source of livelihood for people worldwide; they provide us with high-quality woods that sell for very high prices in the market.
The wood’s finest quality may cost as much like today’s latest iPhone to put things into perspective.
The story I narrate today is of a wood-cutter and his wisdom in decision making.
The Tension Around You
In Mongolia’s slumps lived a person who had no job to earn money and feed his family of five.
He would often stay tense, and this stress was clearly visible to the people he interacted with throughout the day.
It was a fine morning when a friend recommended him to be a woodcutter. The town they lived in had a forest nearby and was one of the most famous markets for wood traders.
The Job Begins
The person was advised to start by cutting wood and selling it into the nearby market.
It took him some of his savings to purchase an axe, and the cutting process began. Every morning the woodcutter would go in the forest, cut the woods, and at the end of the day, he would tie them with a string and then carry them on his back to the primary market.
Several days passed, and the woodcutter would repeat the same process each day. Well, as you would have anticipated by the nature of the person until now, he was pursued by what we all conceived.
The Axe Or The Trolley
As the woodcutter had to carry the woods on his back, he would often get tired and feel that he wouldn’t get the best returns for his efforts.
He thought of easing down the process as soon as he could muster up some savings.
Several more days past and the woodcutter was able to pile up some bucks, and he had two options to choose between; he could either choose to have a sharper axe that would cut twice the number of woods or have a trolley that would ease his pain and allow him to get back home early.
Ease Over Success?
He chose the latter and bought a trolley; some days of easiness came up but were soon overshadowed by the trouble that followed.
The woodcutter required far more effort to cut the wood, and the process would last till the dusk, but the quantity cut down would be far lesser.
When the situation remained the same for some days, the woodcutter got demotivated and quit the job to get back to his old lifestyle; jobless.
He would now curse his friend, who advised him to invest his saving into buying an axe, which bought nothing but “sorrows.” As soon as his friend got to know about this, he visited him.
The friend inquired why the woodcutter thought it was his mistake; the woodcutter explained the entire sequence of events, and his wise friend figured out where the problem occurred.
The Missed Axe
His friend asked him about the axe he was using; he said he didn’t have an axe replacement because he didn’t think he “needed one” but bought the trolley in exchange, eased down the process.
His friend told him that an axe loses its sharpness over time, and it was the fundamental reason he would cut lesser trees even after working more.
This happens with each of us; the inability to manage costs in terms of the benefits they bring often causes us to make decisions like the woodcutter.
Decisions Determine Success
Looking for luxury, easiness, and recognition, we would often waste a significant proportion of our resources without considering the drawbacks they bring to us.
On the other hand, we would be shy of investing the same amount in a business because it might lose the entire cost.
We act no differently from the woodcutter and buy the trolley while leaving the axe. The article below shall enlighten you with cost management terms and leave an impact on your financial decision-making.
Introduction To Cost Management & Its Implementation In Businesses
Cost Management is the technique by which the planning and controlling of the project’s budget are executed.
With cost management, projects’ expenses are calculated, which is extremely important to limit a project’s expenditure and avoid budgeting.
However, the calculated amount is approximate, and it usually fluctuates between 10%-20%.
Whether it is a Multi-National Industry or a small business, every business employs a cost management tactic.
Here is how the Cost Management Technique is applied in Businesses:
When the project is executed, a team of experts analyzes the overall budget of the project.
During the execution of the project, all the expenses are monitored and recorded. Once the project is closed, predicted costs vs. actual costs are compared, providing benchmarks for future cost management plans and project budgets.
With the Cost Management Techniques, the businesses can create realistic project estimates which are easier to meet.
Additionally, it helps to complete the projects before deadlines. Similarly, the Utilization of the Cost management technique can be beneficial for educational purposes.
Let’s discuss in detail the need for cost management in education:
Why There is a Need for Cost Management in Education
Mostly, Students have to leave their studies due to a lack of resources. The lack of resources mainly includes the inability to pay the higher cost of studies.
Students fail to figure out a proper financing plan for their educational progression plan about paying their academic fees early.
Consequently, when they graduate from middle school and plan to take college admission, they have to face serious trouble.
The problem is to quit their studies because of the higher fees; they have never planned to pay the beginning costs.
They don’t have enough savings to pay a large number of payments to the institutions.
Similarly, those students who have planned for their studies from the beginning and have calculated the expenses don’t have to face this time. They have enough resources available in backup to take the admissions.
This is how the cost management techniques can help you in completing your education.
Now let me share five benefits of cost management in education.
Five Benefits Of Cost Management In Education
Expenses Are Easier To Manage
When cost management is carried out from time to time, you became well-aware of the available resources, which means you can take significant steps on time to cut down your expenses and save more if you cannot meet the estimated targets.
Similarly, when you have to take admission for studies, you wouldn’t have to face any trouble as you carefully took care of the expenses from the beginning.
On the other hand, where cost management is never carried out, the result is hazardous as the students sometimes have to leave their studies because they cannot manage the expenses in a short time.
Make sure to plan your studies now so that you don’t face any trouble or quit your studies.
Achieving The Budget Targets
Another main benefit of cost management is that it helps in achieving budget targets.
When you have limited your money expenditures, you have to stop yourself from exceeding the target as you know it can disturb the complete cycle.
According to a recent study, nearly 4% of Indian engineers drop out of college before finishing their degrees.
The most crucial reason for the dropout is that the students have to study and have to work to manage their expenses.
However, they fail to manage their costs due to a lack of planning and budget targets.
We need to bring awareness to students about working on the expenditures from the beginning so that the dropout could reach zero.
Thrift; Saving Money For Other Purposes
Thrift means saving money for other purposes or carefully managing money expenditures.
There is a significant impact on savings when you perform cost management frequently.
The saved money can be used for other purposes that benefit or supports educational expenditures.
In this way, you save yourself from unnecessary expenses and protect the funds for additional purposes that will surely help you in the needed time.
Avoiding Debt For Education
When you monitor and record the educational expenses and work according to the plan, you track your financial progress and protect yourself from out of debt.
According to a study, those who funds their education by taking debt suffer from financial stress, and the stress leads to several problems such as less attention towards studies.
I would recommend you monitor your education expenses and manage things by making a plan. So, you don’t have to apply for debt for studies.
Avoiding debt wouldn’t only help you concentrate more on your studies and be great for your health.
An Effective Way To Prepare For The Crisis-State
“Tough times never last but tough people do”-Robert Schaller.
You never know what the next beginning of the day would come up with; You shall always stay conscious and equipped to face the worst of all circumstances.
A successful cost management policy would be a significant factor in determining how you deal with tough times.
Wasting money on needless in good times would lead to no money left when you need it. Make sure to keep your savings percentage as a healthy proportion of your salary so that you could cater to hard times.
Life is short, and the decisions you make have a massive impact on your family’s life.
“Hardships often prepare ordinary people for an extraordinary destiny”-CS lewis.
Tracking your monthly cost records and making adjustments likewise shall come hard at you initially, but the ease it creates towards the end is worth every hardship you bear.
Cost management is a unique trait, and developing it shall require consistent practice and sheer commitment.
Lack of availability of the cost management skill is a drawback that our county faces, which must be addressed.
This article was my attempt to highlight the importance of proactive cost management in an individual’s life; working together towards improvement shall take us to new highs, pushing the limits further.
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