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

RELATED TERMS
  1. Performance Budget

    A budget that reflects the input of resources and the output ...
  2. Capital Budgeting

    The process in which a business determines whether projects such ...
  3. Zero-Based Budgeting - ZBB

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

    An estimation of the cash inflows and outflows for a business ...
  5. Revenue

    The amount of money that a company actually receives during a ...
  6. Chasing Nickels Around Dollar Bills

    A slang term describing what a company's management does when ...
Related Articles
  1. How Much Debt Can You Handle?
    Budgeting

    How Much Debt Can You Handle?

  2. 10 Tips For Achieving Financial Security
    Savings

    10 Tips For Achieving Financial Security

  3. Bloated Budget? How To Trim The Fat
    Options & Futures

    Bloated Budget? How To Trim The Fat

  4. Top 5 Budgeting Questions Answered
    Options & Futures

    Top 5 Budgeting Questions Answered

comments powered by Disqus
Hot Definitions
  1. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  2. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  5. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  6. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
Trading Center