Part A: Budgeting
What is a Budget?
A budget is a plan for money, estimate
of expected revenues and expenses
for the future.
Helps to determine if you can save or
need to borrow money, or whether
you need to consider other financial
changes.
What makes up a budget?
Revenue: ‘money in’, income, money
received
Expenses/Expenditures: ‘money out’,
outflow of money, cost, payment for
goods and services
What is a balanced budget?
A balanced budget is when your
revenue and expenses match exactly.
Revenues – Expenses = $0
Other Possibilities:
Surplus: excess, when revenues
exceed expenses, positive balance (+)
Deficit: deficiency, when expenses
exceed revenues, negative balance (-)
What is a debt?
When your expenses exceed your
revenues (deficit), you will need to
borrow money.
The amount owing on borrowings is
called a debt.
Debrief
The budgeting process is an integral
part of financial management for
individuals, businesses, organizations
and governments. This fiscal plan
allows for the development of
strategies for saving, borrowing and
spending.
Discussion
What would happen if people,
businesses or the government failed
to budget their finances?