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.


Loading the player...


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.

  1. Revenue

    The amount of money that a company actually receives during a ...
  2. Performance Budget

    A budget that reflects the input of resources and the output ...
  3. Chasing Nickels Around Dollar Bills

    A slang term describing what a company's management does when ...
  4. Zero-Based Budgeting - ZBB

    A method of budgeting in which all expenses must be justified ...
  5. Cash Budget

    An estimation of the cash inflows and outflows for a business ...
  6. Capital Budgeting

    The process in which a business determines whether projects such ...
Related Articles
  1. Retirement

    4 Reasons Why Americans Retire in the Dominican Republic

    Understand why many Americans are deciding to retire internationally. Learn about the top four reasons why Americans are retiring to the Dominican Republic.
  2. Budgeting

    How to Save Money on Your Disney Vacation

    Understand why Disney Parks are attractive vacation destinations and why they are expensive. Learn five money-saving tips for Disney vacations.
  3. Retirement

    The 5 Best Retirement Communities in Houston, Texas

    Learn why the Houston, Texas area is one of the most popular retirement destinations, and discover five of the top retirement communities in the area.
  4. Investing

    How is Programmatic Advertising Changing Media?

    Understand what programmatic advertising is as well as the technology that drives it. Learn about the top four ways programmatic advertising is changing media.
  5. Budgeting

    Top 7 Money Saving Tips for Eating Out

    Discover seven money-saving options available to consumers who are looking to partake in the luxury of dining out while cutting down on cost.
  6. Savings

    The 6 Best Alternatives to Hotels

    Discover information about some of the many-available and much-less expensive alternatives to staying in hotels when you are traveling.
  7. Home & Auto

    7 Mistakes to Avoid When Buying an Engagement Ring

    Understand why the purchase of an engagement ring is so important. Learn about seven key mistakes to avoid when purchasing an engagement ring.
  8. Home & Auto

    5 Mistakes to Avoid When Buying a New Home

    Learn about home ownership and some of the pitfalls a potential homebuyer faces. Understand five specific mistakes all homebuyers should avoid.
  9. Budgeting

    How Much Debt Can You Handle?

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

    10 Tips For Achieving Financial Security

    Follow this sound advice and plan for a comfortable future.
  1. Is the Social Security administration a government corporation?

    The U.S. Social Security Administration (SSA) is a government agency, not a government corporation. President Franklin Roosevelt ... Read Full Answer >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  2. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  3. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  4. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  5. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  6. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!