Balanced Budget

Loading the player...

What is a 'Balanced Budget'

A balanced budget is a situation in financial planning or the budgeting process where total revenues are equal to or greater than total expenses. A budget can be considered balanced in hindsight, after a full year's worth of revenues and expenses have been incurred and recorded; a company's operating budget for an upcoming year can also be called balanced based on predictions or estimates.

BREAKING DOWN 'Balanced Budget'

The phrase "balanced budget" is commonly used in reference to official government budgets. For example, governments may issue a press release stating that they have a balanced budget for the upcoming fiscal year, or politicians may campaign on a promise to balance the budget once in office.

It is important to understand that the phrase "balanced budget" can refer to either a situation where revenues equal expenses or where revenues exceed expenses, but not where expenses exceed revenues.

RELATED TERMS
  1. Budget

    An estimation of the revenue and expenses over a specified future ...
  2. Budget Manual

    A set of instructions used within large organizations to prepare ...
  3. Federal Budget

    The federal budget is an itemized plan for the annual public ...
  4. Budget Surplus

    A situation in which income exceeds expenditures. The term "budget ...
  5. Activity-Based Budgeting - ABB

    A method of budgeting in which the activities that incur costs ...
  6. Treasury Budget

    Data released by the U.S. Treasury on a monthly basis that accounts ...
Related Articles
  1. Budgeting

    The Complete Guide To Planning A Yearly Budget

    A personal budget is a useful tool for tracking your income and expenses.
  2. Budgeting

    How Budgeting Works For Companies

    Learn how to break down and understand a corporate budget.
  3. Investing Basics

    Capital Budgeting: Introduction

    All of us, at one time or another, have had to deal with either preparing or following a budget. In fact, many households manage their financial affairs through a budget. Businesses do the same ...
  4. Options & Futures

    Damage Control For A Busted Budget

    Budgets break down all the time. Here are some ways to get it back on track.
  5. Investing Basics

    Capital Budgeting

    Learn the process through which businesses determine whether projects are worth pursuing.
  6. Budgeting

    Bailing On Your Budget

    Being realistic and honest with yourself will help you determine if you should throw away your existing budget.
  7. Budgeting

    Budgeting Basics - Conclusion

    By Amy FontinelleBudgeting is an important component of financial success and one that's not difficult to implement. Let's recap what we've learned in this tutorial: Budgeting isn't just ...
  8. Budgeting

    5 Reasons Why You Can't Stick To Your Budget

    You want to stay on track with your finances, but these fatal budgeting flaws may be holding you back.
  9. Budgeting

    This Is the Year to Start Budgeting

    Whether your issue is credit card debt, student loans (or the fact that Social Security isn't rising next year), it's time to learn how to build a budget.
  10. Professionals

    Budgeting Your Small Business

    Budgeting helps small businesses determine if they have enough money to fund operations, expand and generate income.
RELATED FAQS
  1. What's the difference between budgeting and financial forecasting?

    Learn about financial budgeting and financial forecasting and the main differences between the two management decision-making ... Read Answer >>
  2. How does a nation's national debt affect the budget process?

    See how the national debt has traditionally impacted, or purported to impact, the budgeting process for the U.S. federal ... Read Answer >>
  3. What are the pros and cons of operating on a balanced-budget?

    Take a brief look at some of the major arguments for and against balanced budgets for the U.S. government, the largest debtor ... Read Answer >>
  4. Why should I bother creating a budget?

    Creating and using a budget is a valuable tool for all demographics; it's not just for those who need to closely monitor ... Read Answer >>
  5. What factors should a company consider when creating a marketing budget?

    Understand the process of creating a marketing budget, and learn the specific factors that should be considered for any company ... Read Answer >>
  6. Which countries run the largest budget deficits?

    Discover the countries with the largest budget deficits and what it means. Deficits are influenced by the economy and also ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center