We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is a Budget?

Dan Cavallari
By Dan Cavallari
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A budget is a type of list that clearly defines the profits and losses of a business or person. It is useful for helping a person or business manage money in terms of spending and saving. Many people make a budget for short-term goals, such as a vacation or a business forecast, while others may write budgets for more long-term spending and savings plans. The different categories included in budgets will vary according to the purpose of the document, as well as the overall goals of the person writing it.

A business budget is geared toward tracking how much the business has spent and how much it has profited. Many business decisions will be based off budgets, and the business owner may reduce or expand spending accordingly. A budget that is reporting large profits may, for example, allow a business owner to expand the business, stock more products, or do more advertising. If the business is reporting less income, a business owner may decide instead to cut spending, reduce stock, or even lay off employees, depending on how severe of a loss the business is enduring. A budget can also help a business owner stay organized during tax time, when profits and losses will need to be reported for tax purposes.

Individuals may draw up a home budget to determine how much money needs to be spent on bills, how much can be spent on recreation, and how much should be saved. The budget may be drawn up to accomplish short-term goals, such as paying off a car loan or saving up for a down payment on a home, or it may be a more long-term plan that allows the individual to track his or her spending habits and adjust them accordingly. Budgets can be changed, sometimes drastically, according to changes in a person's life; if a married couple, for example, has a child, budgets will need to be adjusted drastically to account for expenses associated with the child-rearing.

Budgets can also be drawn up for vacations or business trips, or other special events such as a party, wedding, and so on. These budgets are designed with the specific event or trip in mind, and the person can determine ahead of time how much money he or she intends to spend on different aspects of the trip or event. If he or she ends up spending more than they had budgeted, they are said to be over-budget.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

By animegal — On May 22, 2011

If you are planning a budget for a long trip, around 6 months, which kinds of things should be included in your calculations?

I find making a budget to be quite difficult, and wonder if anyone has some tips on how to make the process as painless as possible.

I would also like to figure in any income I might generate during my travels, but as I don't know exactly what that might be now, it seems extra hard to plan.

Also, does anyone know if there are free services that are offered that can teach you how to make a realistic budget and stick to it?

I was never great a math, so I could use the extra help.

By Sara007 — On May 20, 2011

I think budgets are as important for households as they are for businesses. Knowing your income, expenses and how much you have to spend on daily items, as well as for long term purchases is important to keeping your family safe and secure.

I love watching the show, Until Debt Do Us Part, which takes struggling couples and shows them how to budget their finances. With too much credit available to people, the average person these days seems to have no clue how to make household finances work.

I believe that if you want to have a happy marriage, you need to make sure you finances are in good shape. After all, money remains the number one cause of divorce.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.