What Is the Purpose of a Budget?
Last Updated Apr 1, 2020 9:39:13 PM ET
The purpose of a budget is to ensure that a household's or business's expenses do not amount to more than the income. A budget can also help individuals properly allocate money to different categories to ensure that all of the basic needs of the family or company are met.
There are many different kinds of budgets, but one popular option is the zero-based budget. In these types of budgets, the income is divided into categories until there is nothing left unassigned. This is where the zero comes in. A budget only works, however, if it is adhered to, and if more is spent in a category than was allotted, the budget will be considered in the red.
More From Reference
What Are the Pros and Cons of Restorative Justice?
Rhymes to Remember the Order of the Planets
From Boyd to Chao to Buttigieg: The History of the Secretary of Transportation
Your Guide to Renewable Energy Resource Types
Here’s How the COVID-19 Pandemic Changed In-Person Retail Shopping in Lasting Ways
A Brief History of Insults: How Different Cultures Use Spoken and Written Verse to Mock and Mediate