It is a process where you make a comprehensive financial plan about where and how much money you spent as compared to the amount you are earning during a specific financial year. Through this plan, you can decide in advance whether you have enough money for spending on your needs as compared to what you are earning. Many people don’t know how much they are earning and how much they are spending and usually, later part is greater which sucks them in debt every year. Budgeting is another term for balancing income and expense.
Organizations develop their budgeting plans to keep track of their spending. Usually, these plans are developed on a semi-annual or on annual basis. At the end of the defined period, if the budget is surplus, it means your profits are higher than your expenses. If there is a balanced budget, it means revenues are equal to the expected expense and if there is a deficit budget, it means you are bearing more expenses as compared to your revenues.
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