Some Business English for you guys. One of my classes the other day had a really hard time understanding the difference between:

• A budget
  
• To budget
  
• To budget for
  
• To be on budget
  

So, I'll briefly explain how we use these terms. It's important because using them incorrectly can definitely lead to confusion

A budget is a financial document that lays out how you plan to use your money OR how you did use your money. A budget can refer to reality or to a future plan. It contains budget items which are the individual things or services or programs and how much you spent or will spend on them. My typical monthly budget looks something like this:

• Paper $5
  
• Print cartridge refills $10
  
• New textbooks $20
  
• Pens $1
  

So I have budget items for paper, refills, textbooks, and pens. Anything else is off the budget which means I haven't planned for those expenses. But there is money in the budget for new textbooks, even though I only buy new books every two or three months.

To budget means to make a budget, or a plan. At the beginning of the year I budgeted my expenses. In other words, I made that little plan you see above.

Especially when we talk about people, and not businesses, to budget can also mean to limit your expenses. I budgeted $1 for pens. That means I will not spend more money than that on pens. Or if my friend invites me to go to an Ace of Base concert, I can say, "Sorry, the tickets are too expensive. I only budgeted $50 for concerts this month."

Which brings us to to budget for something. In this case, I mean that I only plan to spend $50 on concerts, for the purpose of going to concerts. I can also budget for situations, or things that may not happen. I budgeted $30 for textbooks, but I may not actually spend that money. Or I can budget for emergencies. That means that I set aside some money in case something bad happens. When you ask your boss if there will be a New Year's Party at work, he or she may say, "Sorry, we didn't budget for that." That means we didn't set aside money for that purpose. We didn't put it in our budget as an item. There may be some extra money lying around, but that money may also be budgeted for something else!

Finally to be on budget means that you are spending as much money as you planned to spend, or even less. So if my company budgets $1000 for a new website by October, and at the present moment we have only spent $600, I can say we are on budget. Or if we have spent $600, but I realize we will need to pay another $600 to the webmaster in September, then we are not on budget. In fact we are off budget, because while we still haven't spent the full $1000, we plan to spend more than that.

Got it?