What is a balanced budget?

A balanced budget refers to a financial situation in which revenue is equal to or greater than expenses. The term can be applied to a range of situations though it's commonly used in the context of government budgeting. Proponents of a balanced budget argue that spending that is greater than revenue can be fiscally damaging.

Why is a balanced budget important?

Achieving a balanced budget is a fundamental financial practice that leads to financial stability, reduced stress, and a more secure future. By evaluating your income, tracking your expenses, and making informed decisions about your spending, you can achieve a balanced budget and take control of your finances.

When is a deficit considered a balanced budget?

A deficit happens when government spending exceeds its income. Conversely, the budget is considered balanced if the government's revenue and expenditure total $2 trillion for the year.