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Types of budgeting depend on the use of the budget which could either be personal or business budgets. Business and Personal Budgets. Budgeting is simply the creation of a plan to properly manage money. A budget usually covers a period of time; for instance, a one-year or five-year budget plan.
The purpose of the budgeting process is to provide a budget figure for each item. As time passes, actual spending and revenues enter the list to compare with original budget figures. Where budget and actual figures differ, the difference is called a variance.