What is a Balanced Budget?
How Does a Balanced Budget Work?
For example, let's assume that John Doe and his wife Jane Doe earn $100,000 a year. Jane analyzes the couple's expenditures for the full year and discovers that they have spent $106,000. Because the couple's expenses exceed their , John and Jane do not have a balanced budget.
In some cases, people or countries spend less than they take in, which creates an opportunity to save or pay down debt. In those situations, people might say a balanced budget exists because at least expenses don't exceed .
Why Does a Balanced Budget Matter?
In personal finance, a balanced budget is one of the most basic steps to financial freedom. In government, a balanced budget can be one of the most controversial, contentious hot buttons, because taxpayers and politicians often argue about where to cut spending or how to invest surpluses.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.