It is called a budget, the various calculations and estimates that are planned, distributing the resources in this or that expense that is considered to be executed, being carried out before carrying out one or several economic activities, trying to foresee the possible expenses that may be incurred. they had to do and the amounts estimated to be necessary for that purpose.
The budgets allow estimating the possible expenses, so that during the economic processes, savings can be made if the situation allows it or, where appropriate, make economic aggregations to the previously established budget, to cover expenses that exceed the budget or that were not initially planned. , so that in this way said expenses are fully complied with.
These are used both by companies, governments, institutions (public and private), and by individuals, as is the case with family budgets, among others.
The different types of budgets are:
Budgets can be classified by various criteria, for belonging to a government, a company, a specific branch or category, for being family, personal and others.
Public.- These are the budgets made by the states (understood by state as the governmental entity of a country), for the maintenance of public finances, entities, dependencies and/or state companies. This is the case, for example, of the federal (in the federal republics), state and municipal budgets, as well as the budgets that are estimated for each government agency.
Private.- These are budgets made by private economic entities, such as companies, businesses and industries, as well as budgets that we could call “minor” that are made by families or individuals (family budgets). They estimate the various resources available or that it is believed can be obtained (income and profits), as well as the expenses that are expected to be incurred (expenses).
Fixed or rigid budgets.- They are those that are made in companies estimating costs and possible sales, within a specific budget period, taking them as a starting point for the consequent economic operations, estimating them within fixed limits, but where it is not carried out. no type of adjustment with respect to the changes that are observed in the “real” economic activities.
Flexible budgets.- They are the budgets that, although they are the result of estimates, calculations and research aimed at anticipating income, expenses, sales and purchases, within a certain period, do allow adjustments to be made (for example cuts or increases in this or that specific branch), as events occur, (for example, the drop in sales or the rise in prices of materials and items within a company or factory, so that these changes remain within the budget without affecting it In its whole.
Long-term budgets.- They are those that establish guidelines and resources to solve expenses during a relatively long period of time. For example a fiscal year, or a longer period even a year.
Short-term budgets.- They are those that are established to cover the estimated expenses, within a relatively short period, which can be for example six-monthly, quarterly, monthly, weekly, or daily. An example could be the quarterly budget of a company, or the family budget (for a fortnight or a week), which are usually small in terms of the estimated time of expenses and income.
Business or business budgets.- This is the estimate of the income that is expected to be obtained during a certain period of time, as well as that of the existing economic resources, the needs in terms of the purchase of materials, payment of services to third parties , payment of salaries, maintenance costs of facilities, etc. Making a balance of the resources that you have and those that can be obtained, and the expenses that are foreseen, you can see for said budget period. In this type of budget, as in all others, cuts are made in the event that the expected resources and profits are not obtained or that, where appropriate, the expenses exceed what is foreseen in the budget itself.
Government or government budget.- This is the calculation of the various resources that are available, those that are believed to be captured through the collection of taxes, sale of some goods or products belonging to the state (such as in the case of oil countries), sale of state-owned companies or real estate, etc., the calculation through estimates, of the amounts that are projected as expenses for various branches, salaries, purchase of products or payment of services, etc.
Being that in this type of budgets they are always elaborated by means of the proposal of the executive power going through processes such as the discussion, modification and approval of the same, by the chambers (of deputies, diners, lords, representatives or whatever it is called in the country), at the request of the executive power that makes a budget proposal, for each branch of government, such as education, the army, public works, the payment of salaries of state workers, etc.
It should be noted that this type of government budget is prepared by first estimating the expenses and investments that could be made, and then “searching” for the sources of resources with which said expenses and investments are intended to be financed. Establishing a “fixed” amount of spending, where the expenses are made trying to reach the established limit, so that in the next budget period the resources to a certain branch are not reduced, or in its case, savings are made (the most convenient), so as not to reach the “cap” budgeted as an expense, in some branch.
Another point to highlight in government budgets is that they are linked to state policy, that is, expenditures are focused on items that are politically believed to be suitable for development or mediate, immediate or long-term national interests. . An example would be the government budgets that focus on social development, through investments in infrastructure (roads, bridges, ports, airports, educational facilities, hospitals, services or economic “aid” to the population), focused on education (investment in educational infrastructures, technologies for education, books, teacher training, breakfasts and support for students such as scholarships, etc.), or military expenses among other items,
Types of Government Budgets:
Educational budget.- It is the budget that governments allocate for the construction and maintenance of educational establishments, purchase of auxiliary equipment for education, such as computer equipment, chemistry equipment, antennas to capture audiovisual signals and televisions (as in the case of Mexico for use in the network of telesecundarias schools), books and the payment of teachers and other employees of the sector. Also for the creation and maintenance of various museums and cultural centers.
Health sector budget.- The health sector budget or simply health budget is understood as the economic resources that are allocated by a government, for the supply of public hospitals, in terms of medicines, medical devices, as additional help for emergencies (such as in cases of natural disasters or epidemics), medical research, salaries of doctors, nurses and employees of said sector.
Military budget.- This is the various economic resources that a state allocates for the maintenance, equipment, instruction, expansion of the armed forces (air forces, armed navies, armies), both in terms of the various economic requirements that are they need in the investigation, manufacture or acquisition of various weapons, technological implements, fuel, medicines and other supplies necessary for the maintenance of the armed force of a country.
Current spending.- These are the amounts of money that are allocated by a government, for daily or “current” spending that is made in the various spheres of government and in all dependencies. Simple expenses such as the payment of travel expenses, for example the payment of fuel for official vehicles, the purchase of necessary items in government agencies such as (bottles of water, soap, towels, toilet paper, various cleaning products, office supplies ( ink, paper, pencils, pens, etc.), or the payment of services that are used daily in said dependencies (electricity, telephone, etc.).
Public works budget.- This is the budget allocated to the execution and maintenance of public works, there are various amounts of money that are allocated both to the creation of works such as railways or subways, urban roads, highways, bridges, ports , airports and public buildings, as well as places of recreation such as parks. They are also used to maintain these and other public services, such as the drainage network, the drinking water network and road cleaning, paying the costs of materials, fuel and salaries of state workers or the services of specialized companies who are They are assigned various tasks.