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stilsjx t1_j2dms8k wrote

Reply to comment by PuzzleMeDo in ELI5: Why do companies require annual budget be spent 100%? by angrybird7677

Right.

I’m a volunteer fire fighter. Our captain is responsible for making a budget. It needs to be justified to the village. They base it on last years expenditures plus expected increased costs based on inflation. (Keeping it simple here because it’s ELI5, and I’m not directly involved in their budgetary planning).

They play it cautious throughout the year, in case there is something that comes up unexpectedly…if a hose blows out, or a truck breaks down…those expenses come first. But towards the end of the year, when we still have a surplus, they start buying things off the “nice to have” list, like upgraded nozzles to replace a functional but worn one. Or new PPE for the firefighters that is still within date, but a little rough. The nice thing about that, is replacing them would eventually be a need. This allows them to stay ahead of the curve year over year.

From an outsider, this may look like we spend more in the last month on frivolous things, when in fact they aren’t truly frivolous.

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amulshah7 t1_j2euq4l wrote

I get your point and the other points in this thread about the morale boost from getting new things earlier than expected, but I think it’s still wasteful overall. Upgrading every time earlier than you need means you spend more and waste more in the long run—e.g., replacing the PPE every 2 years instead of every 3 years (however long it’s good for) is more expensive and wastes good PPE. If they donated the old but functional equipment, it would be more excusable (but more work since they have to find somewhere appropriate to donate to).

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