budget

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(bŭj'ĭt) pronunciation
n.
    1. An itemized summary of estimated or intended expenditures for a given period along with proposals for financing them: submitted the annual budget to Congress.
    2. A systematic plan for the expenditure of a usually fixed resource, such as money or time, during a given period: A new car will not be part of our budget this year.
    3. The total sum of money allocated for a particular purpose or period of time: a project with an annual budget of five million dollars.
  1. A stock or collection with definite limits: "his budget of general knowledge" (William Hazlitt).
  2. Appalachian Mountains. A wallet or small pouch.

v., -et·ed, -et·ing, -ets.

v.tr.
  1. To plan in advance the expenditure of: needed help budgeting our income; budgeted my time wisely.
  2. To enter or account for in a budget: forgot to budget the car payments.
v.intr.
To make or use a budget.

adj.
  1. Of or relating to a budget: budget items approved by Congress.
  2. Appropriate for a restricted budget; inexpensive: a budget car; budget meals.

[Middle English bouget, wallet, from Old French bougette, diminutive of bouge, leather bag, from Latin bulga, of Celtic origin.]

budgetary budg'et·ar'y (bŭj'ĭ-tĕr'ē) adj.
budgeter budg'et·er or budg'et·eer' (-ĭ-tîr') n.

A budget is a spending plan used to allocate resources to accomplish an organization's objectives. This management tool coordinates anticipated expenditures in an effort to maximize resources. A budget is time-specific, and it must be flexible to respond to financial and programmatic changes. A budget, in effect, serves as a financial road map for an organization.

(SEE ALSO: Economics of Health; Planning for Public Health)

— GREGORY ERVIN



The practice of devising an annual programme for financial legislation has been attributed to William Lowndes, an official in the Treasury throughout the half-century after 1675. The term dates from the 1730s and is derived from the wallet or ‘bougette’ in which the chancellor of the Exchequer carried his proposals. In the 19th cent. the practice developed by which the annual budget comprised an assessment of Exchequer income and expenditures for the past financial year, together with estimates of expected spending needs in the forthcoming year and the fiscal steps required to provide for them. As the range of economic instruments at the disposal of the state has increased, the budget has lost some of its importance.

budget, inclusive list of proposed expenditures and expected receipts of any person, enterprise, or government for a specified period, usually one year. Budget estimates are based on the expenditures and receipts of a similar previous period, modified by any expected changes. The governmental budget originated during the late 18th cent. in England.

The U.S. Budget

In the United States, the president was not required to submit an annual federal budget estimate until the passage (1921) of the Budget and Accounting Act. According to the act, the president must annually submit to Congress a budget that shows the condition of the Treasury at the end of the last completed fiscal year, its estimated condition at the end of the current fiscal year, and its estimated condition at the end of the ensuing year if the budget proposals are carried out; the revenues and expenditures during the last completed year and the estimates thereof for the current year; recommendations of provisions for meeting the revenues and expenditures for the ensuing year; and any other data considered helpful to Congress in its determination of the government's financial policy. No other administrative officer is allowed to make revenue recommendations unless asked to do so by Congress.

To help the president, the Budget and Accounting Act also created the Bureau of the Budget, under the Treasury Dept., to receive, compile, and criticize estimates of expenditure needs submitted by the various governmental services and to study in detail all government services and recommend to the president any changes that will increase their economy and efficiency. The bureau was transferred (1939) to the executive office of the president, and reconstituted (1970) as the Office of Management and Budget (OMB), with additional functions involving the review of organizational structure within the executive branch of the federal government. The national budget is often regarded as one of the major policy statements of a presidential administration.

The U.S. Budget Deficit

Since the beginning of World War II the national budget has grown immensely, in part because of increased defense expenditures. Revenues have not kept pace with expenditures, and the federal budget has had annual deficits since 1969. During the 1960s and 70s, the overall economy grew faster than the deficits. In the 1980s, however, annual deficits grew to over $200 billion, reaching a record high of $290 billion in 1992.

Budget reforms passed in 1974 mandated congressional budget resolutions to serve as alternatives to the president's proposed budget, and budget impasses became common. The 1985 Gramm-Rudman-Hollings Act tried to control America's escalating deficits by giving the U.S. comptroller general the right to order spending cuts if the president and Congress did not reduce the deficit, but the bill was ultimately declared unconstitutional. There have been repeated calls for balanced budget and line-item veto amendments to the Constitution, but no such measures have been passed. In 1996 a law establishing a limited presidential line-item veto was passed by Congress, but it was ruled unconstitutional in 1998. In the late 1990s budget-tightening measures-aided by the U.S. economic boom-reduced the deficit and led to two consecutive federal budget surpluses (1998-99); back-to-back surpluses had last occurred in 1956-57. In 1998, President Clinton presented to Congress a balanced federal budget, the first such budget since 1969. A balanced budget was maintained through late 2001, but tax cuts, the cost of President Bush's "war on terrorism," increased defense and other spending, and the effects of an economic recession produced a deficit again beginning with the 2002 budget. The 2004 deficit reached a new record level, $412.6 billion, a figure that did not include tens of billions spent on the occupation and reconstruction of Iraq, but it dropped in subsequent years until a financial crisis and severe recession caused it to rise to $455 billion in 2008 and soar to $1.4 trillion in 2009.

Bibliography

See J. D. Savage, Balanced Budgets and American Politics (1988); D. S. Ippolito, Uncertain Legacies: Federal Budget Policies from Roosevelt through Reagan (1990).


Word Tutor:

budgetary

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pronunciation

IN BRIEF: adj. - Of or relating to a set amount of money that can be spent.

pronunciation Specifically, while controls may be effective in reducing budgetary slack, one side effect is that managers then focus on short-term results rather than long-term goals. — http://www.maaw.info/ArticleSummaries/ArtSumVanderStede2000.htm

LearnThatWord.com is a free vocabulary and spelling program where you only pay for results!

sign description: The sign MONEY is made with a B-hand.




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Quotes:

"Budgets are for cutting, that's why you set them." - Dr. Laurence Buckman

"The budget evolved from a management tool into an obstacle to management." - Frank C. Carlucci

"We didn't actually overspend our budget. The health Commission allocation simply fell short of our expenditure." - Keith Davis

"Some couples go over their budgets very carefully every month. Others just go over them." - Sally Poplin

Random House Word Menu:

categories related to 'budgeting'

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Random House Word Menu by Stephen Glazier
For a list of words related to budgeting, see:

  See crossword solutions for the clue Budget.

A budget (from old French bougette, purse) is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending.[1]

A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms.

In summary, the purpose of budgeting is to:

  1. Provide a forecast of revenues and expenditures, that is, construct a model of how our business might perform financially if certain strategies, events and plans are carried out.
  2. Enable the actual financial operation of the business to be measured against the forecast.
  3. Establish the cost constraint for a project, program, or operation.


Contents

Why do we produce budgets?

Budget helps to aid the planning of actual operations by forcing managers to consider how the conditions might change and what steps should be taken now and by encouraging managers to consider problems before they arise. It also helps co-ordinate the activities of the organization by compelling managers to examine relationships between their own operation and those of other departments. Other essentials of budget include:

  • To control resources
  • To communicate plans to various responsibility center managers.
  • To motivate managers to strive to achieve budget goals.
  • To evaluate the performance of managers
  • To provide visibility into the company's performance

Business start-up budget

The process of calculating the costs of starting a small business begins with a list of all necessary purchases including tangible assets (for example, equipment, inventory) and services (for example, remodeling, insurance), working capital, sources and collateral. The budget should contain a narrative explaining how you decided on the amount of this reserve and a description of the expected financial results of business activities. The assets should be valued with each and every cost. All other expenses are like labour factory overhead all freshmen expenses are also included into business budgeting.

Corporate budget

The budget of a company is often compiled annually, but may not be. A finished budget, usually requiring considerable effort, is a plan for the short-term future, typically one year (see budget year). While traditionally the Finance department compiles the company's budget, modern software allows hundreds or even thousands of people in various departments (operations, human resources, IT, etc.) to list their expected revenues and expenses in the final budget.

If the actual figures delivered through the budget period come close to the budget, this suggests that the managers understand their business and have been successfully driving it in the intended direction. On the other hand, if the figures diverge wildly from the budget, this sends an 'out of control' signal, and the share price could suffer as a result.

Event management budget

A budget is a fundamental tool for an event director to predict with reasonable accuracy whether the event will result in a profit, a loss or will break-even. A budget can also be used as a pricing tool.

There are two basic approaches or philosophies when it comes to budgeting. One approach is telling you on mathematical models, and the other on people.

The first school of thought believes that financial models, if properly constructed, can be used to predict the future. The focus is on variables, inputs and outputs, drivers and the like. Investments of time and money are devoted to perfecting these models, which are typically held in some type of financial spreadsheet application.

The other school of thought holds that it’s not about models, it’s about people. No matter how sophisticated models can get, the best information comes from the people in the business. The focus is therefore in engaging the managers in the business more fully in the budget process, and building accountability for the results. The companies that adhere to this approach have their managers develop their own budgets. While many companies would say that they do both, in reality the investment of time and money falls squarely in one approach or the other.

Government budget

The budget of a government is a summary or plan of the intended revenues and expenditures of that government.

United States

The federal budget is prepared by the Office of Management and Budget, and submitted to Congress for consideration. Invariably, Congress makes many and substantial changes. Nearly all American states are required to have balanced budgets, but the federal government is allowed to run deficits.

India

The budget is prepared by the Budget Division of Department of Economic Affairs of the Ministry of Finance annually. This includes supplementary excess grants and when a proclamation by the President as to failure of Constitutional machinery is in operation in relation to a State or a Union Territory, preparation of the Budget of such State. The railway budget is presented separately.

Philippines

The Philippine budget is considered the most complicated in the world, incorporating multiple approaches in one single budget system: line-item (budget execution), performance (budget accountability), and zero-based (budget preparation). The Department of Budget and Management prepares the National Expenditure Program and forwards it to the Committee on Appropriations of the House of Representative to come up with a General Appropriations Bill (GAB). The GAB will go through budget deliberations and voting; the same process occurs when the GAB is transmitted to the Philippine Senate.

After both houses of Congress approves the GAB, the President signs the bill into a General Appropriations Act (GAA); also, the President may opt to veto the GAB and have it returned to the legislative branch or leave the bill unsigned for 30 days and lapse into law. There are two types of budget bill veto: the line-item veto and the veto of the whole budget.

Personal or family budget

In a personal or family budget all sources of income (inflows) are identified and expenses (outflows) are planned with the intent of matching outflows to inflows (making ends meet). In consumer theory, the equation restricting an individual or household to spend no more than its total resources is often called the budget constraint.

Budget types

  • Sales budget – an estimate of future sales, often broken down into both units and dollars. It is used to create company sales goals.
  • Production budget – an estimate of the number of units that must be manufactured to meet the sales goals. The production budget also estimates the various costs involved with manufacturing those units, including labor and material. Created by product oriented companies.
  • Cash flow/cash budget – a prediction of future cash receipts and expenditures for a particular time period. It usually covers a period in the short term future. The cash flow budget helps the business determine when income will be sufficient to cover expenses and when the company will need to seek outside financing.
  • Marketing budget – an estimate of the funds needed for promotion, advertising, and public relations in order to market the product or service.
  • Project budget – a prediction of the costs associated with a particular company project. These costs include labor, materials, and other related expenses. The project budget is often broken down into specific tasks, with task budgets assigned to each. A cost estimate is used to establish a project budget.
  • Revenue budget – consists of revenue receipts of government and the expenditure met from these revenues. Tax revenues are made up of taxes and other duties that the government levies.
  • Expenditure budget – includes spending data items.

See also

References

External links


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Dansk (Danish)
n. - budget
v. tr. - klare på budgettet
v. intr. - budgettere
adj. - budget-

idioms:

  • budget for    bugettere med

Nederlands (Dutch)
budget, begroting, begroten, goedkoop (aanbieding)

Français (French)
n. - (gén, Fin) budget, budget (Parlement), loi des finances
v. tr. - budgétiser, budgéter
v. intr. - dresser ou préparer un budget, (gén) inscrire qch à son budget, prévoir des frais de qch
adj. - (Écon, Fin) budgétaire, (présentation) du budget, (US, Comm) de crédit, pour petits budgets, économique

idioms:

  • budget for    (Écon) incrire/porter au budget
  • on a budget    disposer d'un budget

Deutsch (German)
n. - Etat, Haushaltsplan
v. - budgetieren, (im Etat) einplanen
adj. - nicht teuer, preiswert

idioms:

  • budget for    etwas einplanen
  • on a budget    haushalten od. wirtschaften müssen

Ελληνική (Greek)
n. - προϋπολογισμός
v. - προϋπολογίζω, καταρτίζω προϋπολογισμό

idioms:

  • budget for    κάνω πρόβλεψη για (δαπάνη)

Italiano (Italian)
stimare, bilancio preventivo

idioms:

  • budget for    stanziare

Português (Portuguese)
n. - orçamento (m)
v. - fazer orçamento

idioms:

  • budget for    orçamento (m)

Русский (Russian)
ассигновать, бюджет

idioms:

  • budget for    выделять средства на

Español (Spanish)
n. - presupuesto
v. tr. - presupuestar
v. intr. - planear el presupuesto
adj. - presupuestado

idioms:

  • budget for    hacer un presupuesto para
  • on a budget    dentro de un presupuesto

Svenska (Swedish)
n. - budget
v. - budgetera

中文(简体)(Chinese (Simplified))
预算, 编入预算, 安排, 编列预算, 低廉的, 收费公道的

idioms:

  • budget for    把...编入预算

中文(繁體)(Chinese (Traditional))
n. - 預算
v. tr. - 編入預算, 安排
v. intr. - 編列預算
adj. - 低廉的, 收費公道的

idioms:

  • budget for    把...編入預算

한국어 (Korean)
n. - 예산, 비용, 뭉치
v. tr. - ~의 예산을 세우다
v. intr. - 예산에 넣다
adj. - 예산의

idioms:

  • budget for    예산을 짜다

日本語 (Japanese)
n. - 予算, 予算案, たくわえ, 安い, 経費
v. - 予算に計上する, 詳しい予定を立てる, 予算を組む

idioms:

  • budget for    予算を立てる

العربيه (Arabic)
‏(الاسم) ميزانيه, تقدير الأيرادات و المصروفات (فعل) عمل ميزانيه, خصص مبالغ‏

עברית (Hebrew)
n. - ‮תקציב‬
v. tr. - ‮תיקצב, הכין תקציב‬
v. intr. - ‮תיקצב, הכין תקציב‬
adj. - ‮נוגע לתקציב, של תקציב‬


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Static Budget (business term)
CBO (abbreviation)
OMB (abbreviation)
Operating Budget Sequence (in accounting)