Budget for a trip? Learn with the Captain Magellan

Francis Magellan was planning to travel around the world, and having only a few euros in his bank account, have decided to ask his father for some “help”.

His father’s answer: “Do you have at least any idea of how much and for what do you need?” The truth is that Francis did not know. As a result his father used a familiar example to give him a small lesson about budgeting. And nothing better than using his favorite subject “The Ferdinand Magellan trip”:

While planning the trip, Captain Magellan needed to present a budget to the Spanish king, however he was not sure how to prepare it first of all, and secondly how to have control of it.

After some thought he believed that while in “open seas” it would be difficult to control how each caravel was performing, how many resources they were consuming. Above all he wanted to make the leaders feel more identified with the plan. Magellan also believed it would also enhance a better communication among the fleet!

As a result he decided to make accountable each of the 5 captains (including himself) of the 5 caravels making the trip and engage in a participation budgeting.

As a result, Captain Magellan , asked each of the 5 leaders to estimate their needs, based for example on the number or characteristics of sailors on board of their own caravels but advise them that he would be looking carefully for overestimating budgets.

The captain knew in advance how difficult was to project a budget like this, as a variance to a static budget was very likely to happen, as the time of the trip was not certain. It would always depend on the wind or tidal currents.