budgeting theories

Budgeting theories explore how individuals and organizations plan their finances. The primary idea is that effective budgeting helps allocate resources efficiently, ensuring priorities are met while controlling expenses. Some theories emphasize zero-based budgeting, where every expense must be justified for each period, promoting discipline. Others advocate incremental budgeting, adjusting previous budgets slightly to adapt to change. Behavioral theories recognize that emotions and biases influence decisions, which can lead to overspending or underfunding. Overall, these theories provide frameworks to create realistic, strategic budgets that support financial stability and goal achievement.