1. What is the average household income in Nepal and how does it compare to the cost of living?

The average household income in Nepal in 2020 was around NPR 193,000 ($1,628) per year. This is significantly lower than the average household income in developed countries such as the United States and many European countries.

The cost of living in Nepal varies depending on the location and lifestyle. In general, the cost of living in Nepal is relatively low compared to developed countries. The monthly expenses for a single person in Kathmandu are estimated to be around NPR 40,000-50,000 ($337-$421), while a family of four would require an average of NPR 85,000-100,000 ($716-$842) per month.

However, despite the low cost of living, many people in Nepal struggle to make ends meet due to the low household income. In fact, according to the World Bank, almost one-fourth of the population in Nepal lives below the poverty line with an income of less than $1.90 per day.

In conclusion, while the cost of living in Nepal may be comparatively low, it can still be challenging for many households to manage their expenses due to their low income levels.

2. How is inflation affecting the cost of living in Nepal and what steps can individuals take to prepare for it?

Inflation is the overall rise in the price level of goods and services in an economy over time. In Nepal, inflation has been a major concern in recent years, significantly affecting the cost of living for individuals.

Some factors that contribute to inflation in Nepal include rising demand for goods and services due to economic growth, increased money supply, depreciation of the Nepalese rupee against other currencies, and global oil price fluctuations.

The effects of inflation on the cost of living can be seen in several ways:

1. Increased prices: Inflation leads to an increase in prices across various sectors such as food, housing, healthcare, education, transportation, etc. This means that people have to spend more money on necessities and daily expenses.

2. Reduced purchasing power: As prices increase, people’s purchasing power decreases. This means that even if individuals have the same amount of income, they will not be able to buy as much with it due to higher prices.

3. Impact on savings: Inflation also affects savings as the value of money decreases over time. This means that individuals may lose money if they keep their savings in cash or low-interest accounts.

To prepare for inflation and its impact on the cost of living, individuals can take some steps such as:

1. Create a budget: It is important to create a budget and track expenses to identify areas where one can cut costs or find alternatives.

2. Invest instead of saving: Instead of keeping money idle or in low-interest accounts, individuals can consider investing their savings in assets like stocks, real estate or gold that are likely to appreciate over time.

3. Diversify investments: Diversifying investments helps minimize risk and provides better returns.

4. Reduce debt: High-interest debts such as credit card debt should be paid off as soon as possible to avoid paying more due to inflation.

5. Increase income: Individuals can look for opportunities for additional sources of income such as freelancing, part-time jobs, renting out properties, etc.

6. Consider fixed-income options: Fixed-income investments such as fixed deposits or bonds provide a guaranteed return that can help counter the effects of inflation.

7. Monitor inflation rates: Keeping an eye on inflation rates can help individuals stay updated and make necessary adjustments to their budget or investment plans.

It is also important for the government to take measures to control and manage inflation through fiscal and monetary policies. This can help keep inflation rates stable and prevent it from significantly affecting the cost of living for individuals in Nepal.

3. What are the most expensive cities to live in Nepal, and why?

1. Kathmandu
The capital city of Nepal, Kathmandu is the most expensive city to live in. The cost of living in Kathmandu is high due to a combination of factors such as high demand for housing, transportation, education, healthcare, and other necessities.

2. Pokhara
Pokhara is another expensive city in Nepal due to its popularity as a tourist destination. The cost of food, accommodation, and transportation is higher here compared to other cities.

3. Biratnagar
Biratnagar, located in the eastern Terai region of Nepal, is a major commercial and industrial hub with a high cost of living. The city has a growing population and limited resources, which results in higher prices for essential goods and services.

4. Bharatpur
Bharatpur is one of the fastest developing cities in Nepal due to its strategic location between Kathmandu and Pokhara. The city has seen rapid urbanization and growth in industries, leading to an increase in living costs.

5. Butwal
Butwal is a major business center and industrial hub in western Nepal. With increasing job opportunities and economic growth, the demand for housing and other necessities has risen, making it one of the most expensive cities to live in.

Overall, the high cost of living in these cities can be attributed to factors such as population growth, limited resources, rapid urbanization and industrial development, and the influx of tourists.

4. What are the average housing prices in Nepal and how does it impact overall cost of living?

The average housing prices in Nepal vary greatly depending on location, size, and quality of the property. In cities like Kathmandu and Pokhara, the average cost of an apartment can range from $50,000 to over $200,000. In rural areas, housing prices are significantly lower.

As a result, the overall cost of living in Nepal is relatively low compared to other countries. However, for those living in major cities and looking for modern amenities and conveniences, the cost of housing can be a significant expense.

Additionally, rental prices may also be high in popular tourist areas like Thamel in Kathmandu or Lakeside in Pokhara. It is important to research and negotiate rental prices before committing to a lease agreement.

5. Are there any tax benefits or incentives available for retirement planning in Nepal?

As of now, there are no specific tax benefits or incentives available for retirement planning in Nepal. However, contributions made towards a retirement savings plan (such as an Employee Provident Fund) are tax-deductible up to a certain limit.

The government of Nepal has also introduced a Voluntary Pension Scheme, which provides tax relief on contributions made towards a pension account. Under this scheme, individuals can contribute up to 25% of their salary or income, subject to a maximum annual contribution limit of NPR 100,000. These contributions are eligible for a tax credit of up to 10% of the contributed amount.

In addition, some employers may also offer employee benefits such as Gratuity and Social Security Schemes, which provide retirement benefits to their employees.

It is recommended to consult with a financial advisor or tax professional for personalized advice on retirement planning and taxation in Nepal.

6. How do health care costs factor into financial planning and cost of living in Nepal?

Health care costs in Nepal can greatly impact financial planning and cost of living for individuals and families. Nepal’s healthcare system is still developing, with limited resources and services available. As a result, accessing quality healthcare can be expensive, especially for serious or chronic conditions.

One of the main factors affecting health care costs in Nepal is the lack of health insurance coverage. According to data from the World Bank, only about 20% of the population has some form of health insurance. This means that a majority of people have to pay out-of-pocket for medical expenses, which can be financially burdensome.

Another factor that contributes to high health care costs is the limited availability of specialized medical facilities and professionals. This often leads to people having to seek treatment abroad, which can be much more expensive than receiving treatment within Nepal.

The cost of medication is also a significant contributor to overall healthcare expenses in Nepal. Many essential medicines are not readily available in public hospitals and must be purchased from private pharmacies at higher prices.

The impact of healthcare costs on financial planning and cost of living can be substantial for individuals and families living in Nepal. High medical expenses can quickly deplete savings and disrupt long-term financial plans. In some cases, families may even have to take on loans or sell assets to cover medical costs.

To mitigate these impacts, it is essential for individuals to incorporate potential healthcare expenses into their financial planning. This includes setting aside a portion of income for emergency medical needs and considering purchasing health insurance if possible.

Overall, managing healthcare costs is a crucial aspect of financial planning in Nepal as it can greatly affect an individual’s financial stability and standard of living.

7. What percentage of income should be allocated towards savings and investments in order to maintain a comfortable standard of living in Nepal?

The percentage of income that should be allocated towards savings and investments varies depending on individual financial goals, priorities, and overall income level. However, it is generally recommended to save at least 20% of one’s income for long-term financial security. This can include setting aside funds for emergency savings, retirement planning, and other investment opportunities. Ultimately, the goal is to find a balance between current expenditures and future financial stability. Therefore, individuals in Nepal may choose to allocate a higher or lower percentage of their income towards savings and investments based on their personal circumstances and financial goals.

8. Are there any government programs or support for retirement planning in Nepal?

There are currently no specific government programs or support for retirement planning in Nepal. However, the government does offer a social security program called the National Pension Scheme, which provides a monthly pension to eligible citizens aged 60 and above. Additionally, there are various private retirement plans offered by insurance companies and banks that individuals can opt for.

9. How do education costs play a role in financial planning, particularly for families, in Nepal?

Education costs play a significant role in financial planning for families in Nepal, as education is highly valued and seen as a pathway to better opportunities and success. Here are some ways education costs impact financial planning for families in Nepal:

1. High Cost of Education:
One of the major challenges for families in Nepal is the high cost of education. Private schools, especially those offering quality education, can be very expensive and out of reach for many families. This cost includes tuition fees, admission fees, textbooks, uniforms, transportation, extracurricular activities, and other expenses.

2. Limited Access to Education:
Nepal has a limited number of government-funded or affordable schools that provide quality education. As a result, families often have to rely on private schools which are expensive and can be a heavy burden on their finances.

3. Early Childhood Education:
In addition to primary and secondary school expenses, many families also have to budget for early childhood education programs such as preschools or Montessori schools, which can be costly.

4. Higher Education:
The cost of higher education is another significant factor in financial planning for families in Nepal. Many parents dream of sending their children abroad for undergraduate or graduate studies due to the limited options and quality of higher education institutions in Nepal.

5. Sacrificing Other Expenses:
To meet the high costs of education, families often have to make sacrifices by cutting down on other expenses such as leisure activities or daily essentials like food and clothing.

6. Effects on Household Budgets:
The high cost of education means that it takes up a considerable portion of the family’s household budget every month which affects their overall financial planning. This can lead to reduced savings or inability to invest in other areas such as health care or retirement funds.

7. Increased Debt:
For many families who cannot afford educational expenses upfront, taking loans or using credit cards becomes necessary but adds to their debt burden.

8. Impact on Financial Stability:
The significant impact of education costs on household budgets and increased debt can have long-term effects on the financial stability of families. It can lead to ongoing financial struggles and a lack of resources for emergency situations.

9. Importance of Financial Planning:
Due to the high cost of education in Nepal, it is crucial for families to have a well-thought-out financial plan that includes budgeting for education expenses, starting from the early years. This helps reduce financial stress and ensures that families can provide their children with quality education without compromising their overall financial stability.

In conclusion, education costs are a crucial aspect of financial planning for families in Nepal, and it is vital to budget and plan for these expenses carefully. Families need to be aware of all potential costs involved and explore affordable alternatives where possible to avoid any long-term impact on their finances.

10. Are there any regulations or restrictions on foreign investments that could affect an individual’s financial plans while living in Nepal?

Yes, there are regulations and restrictions on foreign investments in Nepal that could affect an individual’s financial plans while living in the country. Some key points to consider include:

1. Restrictions on ownership: Foreigners are not allowed to own land in Nepal, except for a small piece of land for personal use or investment purposes.

2. Capital controls: Nepal has strict capital control measures in place, which can make it challenging for foreigners to transfer funds out of the country.

3. Permission requirements: Foreign investors must obtain approval from the Department of Industry (DOI) before making any investments in Nepal. The process can be lengthy and time-consuming.

4. Limited sectors open to foreign investment: While some industries allow full foreign ownership, others have caps on the percentage of foreign ownership allowed or are entirely closed off to foreign investors.

5. Currency conversion limitations: Foreign currency transactions beyond certain specified limits require prior approval from Nepal Rastra Bank (NRB), the central bank of Nepal.

6. Deposits are subject to interest rate caps: The NRB has set a cap on interest rates that banks can offer on deposits, limiting potential returns for investors.

7. Limited options for borrowing money: Non-Nepali individuals and companies cannot take loans from Nepali banks unless they have received special permission from NRB.

8. Higher fees for foreigners: Non-Nepali individuals may face higher fees and taxes compared to local citizens when conducting financial transactions in Nepal.

9. Restrictions may vary by sector and industry: Certain sectors such as agriculture, security printing, trekking/tourism, etc., have specific restrictions or regulations regarding foreigners investing in them.

10. Consult with a professional advisor: It is advisable to consult with a professional financial advisor well-versed in the laws and regulations governing foreign investments in Nepal before making any significant financial decisions while living in the country. They can help navigate through potential challenges and assist in building a sound financial plan that complies with Nepali laws.

11. How do exchange rates impact the cost of living for expats or those earning an income abroad while residing in Nepal?

Exchange rates can have a significant impact on the cost of living for expats or those earning an income abroad while residing in Nepal. If the local currency (Nepalese rupee) is weaker compared to the foreign currency, this means that expats or those earning an income in foreign currency will have more purchasing power and may find living expenses relatively cheaper.

On the other hand, if the local currency is stronger, it means that expats or foreign income earners will have less purchasing power and may find living expenses relatively more expensive. This is because they will need to exchange their foreign currency for Nepalese rupees, which will be at a lower rate.

For example, if an expat earns USD 1000 per month and the exchange rate is USD 1 = NPR 120, they will receive NPR 120,000. However, if the exchange rate changes to USD 1 = NPR 100, they will only receive NPR 100,000. This means their monthly income has decreased despite remaining constant in USD terms.

In addition, fluctuations in exchange rates can also affect the price of imported goods and services. If the Nepalese rupee strengthens against a country’s currency from where goods are imported, then these goods will become cheaper for consumers. Conversely, if the Nepalese rupee weakens against such currencies, then these goods will become more expensive.

Overall, exchange rates play a critical role in determining the cost of living for expats or those earning an income abroad while residing in Nepal. As such, it is essential for individuals to monitor and understand exchange rates to better manage their finances and make informed decisions regarding where they choose to live and work abroad.

12. Is it more financially advantageous to rent or buy a property given the current market conditions in Nepal?

It is difficult to determine whether renting or buying a property is more financially advantageous given the current market conditions in Nepal, as it will depend on individual circumstances and factors such as location, type of property, and personal financial situation.

On one hand, the real estate market in Nepal has been steadily growing over the past few years, with an increase in demand for properties. This could be a good sign for buyers looking to invest in a property as it may indicate potential for appreciation in the future. Additionally, interest rates are currently low, making it more affordable to take out loans for buying a property.

On the other hand, rental prices in major cities like Kathmandu and Pokhara have also been increasing due to high demand from expats and foreign workers. This could make renting a better option for those who are not ready to commit to a long-term investment or do not have enough savings to make a down payment.

Ultimately, it is important for individuals to carefully consider their own financial situation and goals before deciding whether to rent or buy a property. Consulting with a financial advisor or real estate expert may also provide helpful insights into the current market conditions and help determine which option would be more financially advantageous.

13. Are there any unique expenses that are often overlooked when creating a financial plan for living in Nepal?

Some unique expenses to consider when creating a financial plan for living in Nepal are:

1. Visa and immigration fees: Depending on your nationality, you may need to pay for visas and immigration fees in order to live and work in Nepal.

2. Cost of transportation: Transportation costs can add up quickly in Nepal, especially if you plan on traveling within the country or taking frequent trips back home.

3. Rent and utilities: The cost of rent and utilities may vary significantly depending on the location and type of accommodation you choose. Make sure to budget for these expenses accordingly.

4. Health insurance: It is important to have health insurance coverage while living in Nepal, as healthcare costs can be expensive for foreigners.

5. Startup costs: If you are planning to start a business or work remotely from Nepal, there may be startup costs such as registering your company or purchasing necessary equipment.

6. Cultural experiences: Living in Nepal offers many opportunities to explore the country’s rich culture and heritage, but these activities may come at a cost.

7. International taxes: If you are earning income while living in Nepal, it is important to understand your tax obligations both in Nepal and your home country.

8. Household help/staff: Many expats living in Nepal hire help for household chores such as cooking, cleaning, or gardening. This can be a significant expense that should be factored into your budget.

9. Traveler’s insurance: If you plan on traveling frequently within or outside of Nepal, consider purchasing traveler’s insurance to cover unexpected trip cancellations or medical emergencies.

10. Language classes: Learning Nepali can greatly enhance your experience living in the country, but language classes may come with a cost.

11. Special permits and fees for trekking/camping trips: If you are planning on participating in outdoor activities like trekking or camping, there may be special permits or entrance fees required that should be budgeted for.

12. Emergency funds for natural disasters: Nepal is prone to natural disasters such as earthquakes and floods, so it is wise to set aside some emergency funds in case of unexpected events.

13. Personal leisure activities: It is important to also budget for personal leisure activities, such as dining out, going to the movies, or attending cultural events to maintain a healthy work-life balance.

14. Is it necessary to have an emergency savings fund specifically tailored to the cost of living and potential emergencies faced by residents of Nepal?

It is always a wise decision to have an emergency savings fund, regardless of where you live. This fund can provide a financial safety net for unexpected expenses, such as medical emergencies or job loss, and help you maintain your standard of living during tough times.

In Nepal, having an emergency savings fund can be particularly important due to the country’s vulnerability to natural disasters, such as earthquakes and monsoon floods. These events can cause significant damage to homes and livelihoods, making it essential to have a financial cushion to fall back on.

Additionally, the cost of living in Nepal may vary depending on factors such as location and lifestyle choices. By having an emergency savings fund specifically tailored to your individual needs and expenses, you can ensure you are better prepared for any unforeseen circumstances that may arise.

Overall, having an emergency savings fund that takes into account the unique challenges and potential emergencies faced in Nepal can provide peace of mind and financial stability in times of need.

15. Do employers generally offer benefits such as retirement plans or health insurance which can affect an individual’s financial planning choices while working and residing in Nepal?

Employers in Nepal are not legally required to offer benefits such as retirement plans or health insurance to their employees. However, some employers may offer these benefits as part of their employee compensation packages.

In terms of retirement plans, there is a state-run mandatory contributory pension scheme called the Social Security Fund (SSF) which covers employees in both the public and private sectors. Under this scheme, employees and employers contribute a percentage of their salary to a retirement fund, which can be withdrawn upon reaching retirement age.

As for health insurance, there is no national health insurance system in Nepal. However, some employers may choose to provide health insurance coverage for their employees as part of their benefits package. This can vary greatly depending on the employer and the industry they operate in.

Overall, the availability and extent of these benefits in Nepal may affect an individual’s financial planning choices while working and residing in the country. Those who have access to such benefits may consider them when making long-term financial decisions, while those without them may need to plan for these expenses themselves.

16. Are there any cultural factors that could impact one’s spending habits and financial outlook while living in Nepal?

Yes, there are several cultural factors that could impact one’s spending habits and financial outlook while living in Nepal. Some of these factors include:

1. Joint family systems: In Nepal, it is common for multiple generations to live together in the same household. This can affect spending habits as individuals may feel responsible for contributing to the household expenses.

2. Social hierarchy: Nepali society is divided into social classes based on caste and social status. This can lead to pressure or expectations to spend money on material goods to maintain a certain image or status within society.

3. Religious beliefs: Hinduism is the dominant religion in Nepal and it emphasizes simplicity, non-materialism, and contentment with what one has. These beliefs may influence individuals’ spending habits and views on accumulating wealth.

4. Traditional values: Many traditional Nepali values emphasize frugality, saving for future generations, and avoiding debt. These values may impact individuals’ financial outlook and tendency towards saving rather than borrowing.

5. Communal mindset: In Nepal, there is a strong sense of community and support for others within the community. This can lead to a culture of sharing and giving, which may impact spending habits as individuals may prioritize helping others over personal consumption.

6. Influence of Western culture: With globalization and exposure to Western media, there has been an increase in consumerism in Nepal. This can result in individuals adopting more materialistic attitudes towards money and spending.

7.Agricultural economy: Nepal’s economy is primarily based on agriculture, which can have an impact on spending habits as income levels may fluctuate depending on seasonal harvests or natural disasters.

Overall, while there are many cultural factors that could influence one’s spending habits in Nepal, individual experiences and personal values will also play a significant role in shaping their financial outlook.

17. Does the government provide any social security benefits for retirees or individuals with disabilities in Nepal?

Yes, the Government of Nepal does provide social security benefits for retirees and individuals with disabilities through various welfare programs.

1. National Pension Scheme: This is a contributory pension scheme for all citizens aged 60 or above. The monthly pension amount depends on the total contribution made by the person during their working years.

2. Senior Citizen Allowance: This is a non-contributory social security program for citizens over 70 years of age who are not receiving any pension or regular income. They are entitled to a monthly allowance from the government.

3. Disability Allowance: Citizens with permanent disabilities can receive a monthly allowance from the government to support their living expenses.

4. Survivors’ Pension: When a contributor under the National Pension Scheme passes away, their spouse and dependent children can receive a monthly pension as survivors’ benefit.

5. Treatment Assistance Fund: Under this program, citizens who cannot afford expensive medical treatments can receive financial assistance from the government for their treatment.

6. Children’s Welfare Program: Children who have lost both parents or are underprivileged can receive financial support from the government for their education and overall well-being.

7. Social Welfare Fund: This fund provides financial assistance to destitute individuals and families to meet basic needs such as food, shelter, and healthcare.

Additionally, there are some other social security schemes targeted at specific groups such as low-income families, single mothers, farmers, and marginalized communities. However, these schemes may not cover all retired individuals or individuals with disabilities in Nepal, and many people still face challenges in accessing these benefits due to administrative hurdles and limited resources.

18. How has the cost of living in Nepal changed over the past decade, and what predictions are there for future trends?

The cost of living in Nepal has increased steadily over the past decade, with inflation rates averaging around 6% per year. This is primarily due to rising prices of essential commodities such as food and fuel.

In 2010, the Consumer Price Index (CPI) for Nepal was 96.60, and by 2020 it had risen to 138.06, an increase of around 43.05%. This means that goods and services that cost Rs.100 in 2010 would have cost approximately Rs.143 in 2020.

There are several factors that have contributed to this rise in the cost of living in Nepal:

1. Inflationary pressures: As a developing country, Nepal is vulnerable to fluctuations in global commodity prices, especially for essential goods like oil and food. Any disruptions or shortages in the supply chain can lead to price increases.

2. Growing population: The population of Nepal has been steadily increasing, resulting in increased demand for goods and services. This demand-supply gap leads to higher prices.

3. Infrastructure challenges: Poor infrastructure and transportation networks make it difficult to distribute goods across the country efficiently, causing supply bottlenecks and leading to higher prices.

4. Dependence on imports: Nepal has a high dependency on imports for many essential goods, including fuel, which makes it susceptible to changes in international markets.

5. Political instability: Political turmoil can create uncertainty and affect businesses’ operations leading to price increases.

Looking towards the future, it is expected that the cost of living in Nepal will continue to rise at a moderate pace due to various economic factors mentioned above.

The COVID-19 pandemic has also had an impact on the economy and could potentially slow down economic growth, resulting in lower purchasing power for consumers and further impacting the cost of living.

However, with ongoing efforts by the government to improve infrastructure and promote industrial development through initiatives like “Visit Nepal Year,” there is hope for improved economic growth, which could help stabilize the cost of living in the long term.

19. Are there any expected changes to taxation laws in Nepal that could affect financial planning decisions for residents?

At the moment, there are no major changes expected in taxation laws in Nepal that could significantly affect financial planning decisions for residents. However, it is always important to stay informed and up-to-date with any updates or amendments made by the government or relevant authorities. This can help individuals make informed decisions about their finances and plan accordingly.

One potential change that may affect financial planning decisions for residents is the implementation of a new tax system called “National Integrated Tax System (NITS)”. This system aims to streamline and modernize the tax collection process in Nepal. It was initially planned to be implemented in July 2020, but has been delayed due to the COVID-19 pandemic. If implemented successfully, NITS could potentially have an impact on how taxes are calculated and paid, which may require individuals to adjust their financial plans accordingly.

Additionally, the government may introduce new tax rates or exemptions in its annual budget announcement, which could impact financial planning decisions for residents. It is essential to keep track of any changes in tax policies and regulations to ensure proper compliance and effective financial planning.

In general, it is advisable for residents of Nepal to consult with a financial advisor or tax professional for personalized advice on how taxation laws may impact their specific financial situation.

20. What resources or tools are available to help individuals accurately estimate their cost of living and create a realistic budget while living in Nepal?

1. Cost of Living Calculators: Online cost of living calculators, such as Numbeo and Expatistan, can help individuals estimate the overall cost of living in Nepal based on their location and lifestyle preferences.

2. Local Expat Communities: Joining local expat communities or forums can provide valuable insights into the cost of living in Nepal. Members may be able to share their personal experiences and tips for making a budget.

3. Nepali Government Websites: The Nepali government has various websites, such as Department of Immigration and Department of Customs, that provide information on visa costs and import duties, respectively.

4. Accommodation Websites: Websites like Airbnb and Booking.com can give an idea of the cost of accommodation in different areas of Nepal.

5. Travel Blogs: Reading travel blogs written by people living in Nepal can give an accurate picture of the day-to-day expenses for food, transportation, and other daily necessities.

6. Budgeting Apps: Several mobile apps, such as Mint and YNAB (You Need A Budget), allow users to create customized budgets based on their income and expenses.

7. Cost Comparison Websites: Websites like MyWisewise provide a side-by-side comparison between different cities or countries to help individuals understand the difference in cost of living.

8. Salary Surveys: Salary surveys conducted by recruitment firms or chambers of commerce can provide information on average salaries for specific industries in Nepal.

9. Asking Locals: Interacting with locals can also give an idea about the cost of living in different areas of Nepal.

10. Financial Advisor/Consultant: For those who are moving to Nepal for work, seeking advice from a financial advisor or consultant experienced with international relocation may be helpful in creating a realistic budget plan.