Budget (from french bougette) generally refers to a list of all planned expenses and revenues. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms.

Personal or family budget

For more details on this topic, see Personal budget.

In a personal or family budget all sources of income (inflows) are identified and expenses (outflows) are planned with the intent of matching outflows to inflows (making ends meet.)

Government budget

For more details on this topic, see Government budget.

The budget of a government is a summary or plan of the intended revenues and expenditures of that government. In the United States, the federal budget is prepared by the Office of Management and Budget, and submitted to Congress for consideration. Invariably, Congress makes many and substantial changes. Nearly all American states are required to have balanced budgets, but the federal government is allowed to run deficits.

In the UK the budget is prepared by the Chancellor of the Exchequer, the second most important member of the government, and must be passed by Parliament. Parliament seldom makes changes to the budget.

Union Budget in India

In India, the Finance Minister prepares the Union (Federal) Budget and presents it to the Lok Sabha, the House of Representatives on the last day of February month. It has to be approved by Parliament before April 1 which marks the start of the fiscal year in India. The day the Union Budget is presented is considered by many observers to be the most important of India\'s political calendar. It usually has an immediate effect on the nation\'s stock exchanges and also has possible short term political implications. This is in addition to the long term changes that some budgets may lead to, for e.g. Liberalisation of Indian Economy declared by Dr. Manmohan Singh in the 1991 budget when he was the Finance Minister of the country.

Corporate budget

The budget of a company is compiled annually. A finished budget usually requires considerable effort and can be seen as a financial plan for the new financial year. While traditionally the Finance department compiles the company\'s budget, modern software allows hundreds or even thousands of people in the various departments (operations, human resources, IT etc) to contribute their expected revenues and expenses to the final budget.

If the actual numbers delivered through the financial year turn out to be close to the budget, this will demonstrate that the company understands their business and has been successfully driving it in the direction they had planned. On the other hand, if the actuals diverge wildly from the budget, this sends out an \'out of control\' signal and the share price could suffer as a result.

Event Management Budget

A budget and planning tool to assist in calculating and meeting the costs associated with a business or social event. It is a fundamental tool that enable the event director to predict with reasonable accuracy whether the event will result in a profit, a loss or will break-even.

Business Startup Budget

Description of the expected financial results of your business activities. Initial process of calculating your small business start-up costs listing everything you will need to purchase including both tangible assets (for example, equipment, inventory) and services (for example, remodeling, insurance), working capital, sources and collateral. The budget should contain a narrative explaining how you decided on the amount you are putting into this reserve.

Budget line

reflects to all possible combination of two goods that could be purchased, given the prices and the consumer\'s budget

In summary, the purpose of budgeting is to:

1. Provide a forecast of revenues and expenditures i.e. construct a model of how our business might perform financially speaking if certain strategies, events and plans are carried out.
2. Enable the actual financial operation of the business to be measured against the forecast.

See also

• Personal finance
• Deficit
• Budget theory
• Budget surplus
• Budget crisis
• Budget overrun
• Chancellor of the Exchequer (UK budget)
• United States budget process
• Canadian federal budget
• Union budget of India
• Government financial reports
• Variance analysis (accounting)
• United Kingdom budget

References

This article is licensed under the GNU Free Documentation License. It uses material from Wikipedia