GLOSSARY · BUDGETING, SPENDING & SAVING
Budget variance
The difference between what a budget planned for a category and what was actually spent or earned. A small variance that repeats month after month usually means the plan is wrong, not the spending, and the category should be resized at the next review.
Also called: over or under budget, plan versus actual
FORMULA
Variance = actual − planned (and, as a share, variance ÷ planned)
COMPUTE IT WITH YOUR NUMBERS
LEARN IT PROPERLY
CHAPTER · BUDGETING SYSTEMS & REAL-LIFE SOLUTIONS · STRATEGIESChoosing a Tool and Tracking What MattersCHAPTER · BUDGETING SYSTEMS & REAL-LIFE SOLUTIONS · STRATEGIESMonthly and Quarterly Budget ReviewsRELATED TERMS
SOURCES
- Consumer Expenditure Surveys. U.S. Bureau of Labor Statistics.