What Are The Types Of Expenditure Budget?

As a business owner or manager, it’s important to understand the different types of expenditure budgets. Having an awareness of the various budgeting models can help you better manage your finances and ensure that you are making sound financial decisions. 

In this article, I’ll discuss the eight main types of expenditure budgets: fixed, flexible, zero-based, incremental, performance-based, capital, operating, cash and project.

Key Takeaways

  • There are several types of expenditure budgets, including fixed, flexible, zero-based, incremental, performance-based, and activity-based.

  • Each type of expenditure budget has its benefits, such as limiting spending on non-essential items, providing greater control over resource allocation, and identifying wasteful spending for cost reduction strategies.

  • There are also different types of expenditure budgets, including capital, operating, cash, and project budgets, which focus on different aspects of financial planning.

  • Managing expenditure budgets requires careful attention to spending limits, while also maintaining efficiency and quality of service delivery, and keeping accurate records of transactions.

Fixed Expenditure Budget

Fixed Expenditure Budget

Fixed expenses can be a heavy burden, weighing you down like an anchor. A fixed expenditure budget is one that requires specific amounts to be paid out each period for necessary items such as rent or loan payments. This type of budget determine which costs are fixed does not allow for any flexibility and must be followed strictly in order to ensure all bills are paid on time. 


These types of budgeting methods are best suited for those who have steady incomes and do not anticipate much change in their financial situation over the course of the period covered by the budget.


In addition, fixed expenses can help keep individuals from spending too much money on non-essential items since they are limited in how much extra money they have available after paying their required bills. 


For example, if someone has a mortgage payment due every month, they may decide to limit their weekly grocery outings to stay within their overall budgeted amount. This helps them avoid impulse purchases which could lead to overspending and financial problems down the road.


Source: https://gladstonellc.com/what-are-the-types-of-expenditure-budget/


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