Budget Templates & Examples

It is a rule popularized by Senator Elizabeth Warren that says a person's 100% income after tax is divided into three segments 50, 30, and 20. According to the rule, people spend 50% of it on their needs, 30% on things they want, and save only 20% of it. 

• Balanced Budget- In this budget, the revenue and expenditures are at an equal rate. 
• Surplus Budget- It is a well-managed situation when income exceeds outlays or expenditures.
• Deficit Budget- It occurs when the expenditure exceeds the total earned income.  

• Incremental- It takes the previous year’s actual figures to set the current year’s budget. 
• Activity-based- It is a top-down budgeting method. 
• Value Proposition- It evaluates the principal reasons for setting up a budget and compares the value and costs.
• Zero-based- It starts from scratch with all departments budget set at zero. 

A budget serves as a financial plan in every business. It forecasts and tells how a company could perform financially in the future. A budget helps to carry forward different business operations. A manager forecasts possible income and expenditure to get an idea of the profitability. 

A budget must contain the following elements 

• Total income
• Fixed expenses or liabilities
• Flexible costs that may vary time to time
• Unplanned and miscellaneous expenses
• Total savings or surplus
• Total deficit
• Debt services