Glossary

Budgeting

Budget variance

Budget variance is the difference between the amount planned for a category and the income or expense actually recorded during the period.

Reviewing it month by month turns a budget into a decision tool: it shows whether the issue is an unrealistic budget or a specific spending habit.

One-off variances from annual expenses are better fixed by carrying balances between months than by permanently raising the budget.

Related terms

  • Budget — A budget is the advance allocation of your income to spending and saving categories, with later tracking of the differences.
  • 50/30/20 rule — The 50/30/20 rule splits monthly take-home income into 50% for needs, 30% for wants, and 20% for savings and debt repayment.

Bring it to your own numbers

netclariq applies these concepts to your real accounts, debts and investments, with simplified double-entry bookkeeping and without asking for your bank credentials.

Educational content. netclariq does not provide financial, investment, tax or legal advice.