In household budgeting, what is the amount left when income exceeds expenses?

In household budgeting, the amount left when income exceeds expenses is a budget surplus.

A surplus means planned or actual income is greater than spending during a stated period, such as a month or year. A household can use the surplus to build savings, repay debt, invest, or fund a future purchase.

A budget surplus is different from net income. Net income usually means earnings after taxes and deductions, while a surplus compares income with expenses. The opposite situation, when expenses exceed income, is a budget deficit.

Governments and businesses also use these terms, but the basic calculation is the same: subtract total expenses from total income. A positive result is a surplus; a negative result is a deficit. A balanced budget produces neither a surplus nor a deficit.