Budgeting refers to a course of action based upon an estimate of assumed income and expenses. In laymen's terms, it is simply is a term is defined as a plan of operation where one reviews their income and expenditures, often in the effort to create a strategy in order to achieve some financial goal or goals within a specific period of time.

Not all budgets are created or planned with the same methods. There are many types of budgeting. Personal budgeting is quite different from the budgeting performed by a business or corporation, for example. But even within these different categories, there are still differences which exist. Read on to learn about the different types of budgeting.

As stated above, the budgets created and maintained by businesses are naturally very different from personal budgets. In order to decide which type of budget is best for each situation, one must define the purpose of the budget. All budgets are typically created with the intent to: take control of finances, create a plan of action, and make adjustments in order to achieve a financial goal.

Personal Budgets
There are two common types of budgeting for private households. In one instance, the planner creates a budget via the Envelope Method. With this method, the planner will separate the necessary funds into different envelopes every month. This way one can conform that all required bill payments will be met. The other type is known as the Spreadsheet Method, where the planner, from the total monthly income, after taxes, subtracts via each line-item a required amount to be paid that month.

Business Budgets
There are three common types of budgeting for business. One of the most popular forms of business budgeting is that of Capital budgeting. With Capital budgeting, the planner will review and estimate the business' finances through investments and assets. Cash budgeting, another method, deals with the cash-flow: the money going in and out of the business. The third type is Operational budgets, where the operations of the business are reviewed in order to decide how to properly allocate funds and determine, typically within the fiscal year, the total profits.

These are not all of the different types of budgeting, but these are some of the most common types used. It is important for each person to individually decide which type suits their objective best. There are other types of budgeting, such as those for beginning business or for the government, corporations or public services.