SURPLUS BUDGET: A budget shows a surplus of income over expenditure when expenditure is lower than income.
Deficit budget: When a family incurs more expenditure and the income is low there shall be a deficit in the family budget. This may force the family to borrow and there will not be any savings. The deficit budget is not good for the family.
Balanced Budget: When the expenditure and income of a family tally with each other there is neither a surplus nor a deficit. This type of budget is an ideal one and does not lead to tension.
In such cases, though family can work without taking loans but some money should be kept for emergencies. So in this case also either the expenditure needs to be cut down a little or the income to be supplemented. Out of these types of budgets, surplus budget is considered as best budget. Therefore family budget planning should be aim for this type of budget only. Surplus or deficit of the family budget depends upon the family in using the available income. Deficit budget takes place when a family exceeds its limits and incurs more expenditure than its income. The habit of borrowing for excess expenditure leads to deficit budget and create tension and stress. Surplus budget = Income > Expenditure Deficit budget = Expenditure > income Balanced budget = Expenditure = income
Participants