Budget

AAA

DEFINITION of 'Budget'

An estimation of the revenue and expenses over a specified future period of time. A budget can be made for a person, family, group of people, business, government, country, multinational organization or just about anything else that makes and spends money. A budget is a microeconomic concept that shows the tradeoff made when one good is exchanged for another.

INVESTOPEDIA EXPLAINS 'Budget'

A surplus budget means profits are anticipated, while a balanced budget means that revenues are expected to equal expenses. A deficit budget means expenses will exceed revenues. Budgets are usually compiled and re-evaluated on a periodic basis. Adjustments are made to budgets based on the goals of the budgeting organization. In some cases, budget makers are happy to operate at a deficit, while in other cases, operating at a deficit is seen as financially irresponsible.

VIDEO

Loading the player...
RELATED TERMS
  1. Performance Budget

    A budget that reflects the input of resources and the output ...
  2. Small And Midsize Enterprises - ...

    A business that maintains revenues or a number of employees below ...
  3. Zero-Based Budgeting - ZBB

    A method of budgeting in which all expenses must be justified ...
  4. Static Budget

    A type of budget that incorporates anticipated values about inputs ...
  5. Man-Year

    A method of describing the amount of work done by an individual ...
  6. Capital Budgeting

    The process in which a business determines whether projects such ...
RELATED FAQS
  1. What mobile apps are best for tracking your cash budget?

    Several personal finance apps are available to help individuals manage their money on the go. When it comes to managing cash ... Read Full Answer >>
  2. Is there a difference between the cash budget and a credit budget?

    A cash budget outlines the funds available to a business as cash flow. Cash flow may be from revenue or credit received by ... Read Full Answer >>
  3. What role do shareholders play in a capital budget?

    Shareholders play an important role in a capital budget because they're the source of equity capital. In corporate finance, ... Read Full Answer >>
  4. What's the difference between budgeting and financial forecasting?

    Budgeting and financial forecasting are financial planning techniques that help business personnel in the decision-making ... Read Full Answer >>
  5. How does quantifying fixed overhead volume variance show whether a company is profitable ...

    Fixed overhead volume cannot definitively prove a company is profitable, but it can be used to provide an excellent indication ... Read Full Answer >>
  6. What is price variance in cost accounting?

    Price variance in cost accounting is the difference between the actual price paid by a company to purchase an item and its ... Read Full Answer >>
Related Articles
  1. Budgeting

    How Much Debt Can You Handle?

    Follow these five steps to manage debt without cutting up your credit cards.
  2. Savings

    10 Tips For Achieving Financial Security

    Follow this sound advice and plan for a comfortable future.
  3. Options & Futures

    Bloated Budget? How To Trim The Fat

    Blood, sweat and tears should belong in the gym, but your money deserves some training time too.
  4. Options & Futures

    Top 5 Budgeting Questions Answered

    You don't need a degree to understand your money, begin saving and pay down debt.
  5. Budgeting

    3 Alternative Budgeting Styles: Which One Suits You?

    Not everyone is cut out for online or heavily-involved budgeting. Here are some budgeting solutions.
  6. Budgeting

    Tips For Avoiding A Holiday Spending Hangover

    You don't have to go into debt to have a happy and memorable holiday season. Use these tips for a bountiful Yuletide on a Scrooge-like budget.
  7. Savings

    Is Your Financial Situation Sustainable And Renewable?

    Ensuring long-term financial security takes planning and foresight.
  8. Budgeting

    The Beauty Of Budgeting

    Make it to the end of the month, before you run out of money.
  9. Budgeting

    8 Steps To An Organized Financial Life

    Disorganization makes planning difficult, and that can cost you big time.
  10. Credit & Loans

    Prevent Bankruptcy With These Tips

    This financial decision should only be used as a last resort. Find out how to avoid it.

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. 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 ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center