Surplus is the amount from your income that is left after consumption. This surplus amount is needed in order to build wealth. Personal budget surplus is used to imply a situation when your income exceeds your expenditure. This budget surplus may be used to pay-off debt or to make a desired purchase which is been delayed, or it can be used in saving money for future. Conversely, when spending exceeds income then it is called budget deficit, which leads to borrow money and paying interest on the borrowed funds. So, it is advisable to generate surplus for individual needs.
Surplus is simply defined as the difference between the amount of income and the amount of expenditure. This is very easy to grasp. But the real fact is that to create a surplus, we need to spend less than we earn. It means the individual’s spending habits and the life style must be changed. If you want to generate more surplus you must either lower your consumption, or increase your income, or it can be both.
But usually, every individual would always love to have more. The reason behind this is, people want to save more money without affecting their quality of life. So, every individual need to work hard to continue the same quality of living and (s)he must be capable of making huge changes in their lives in order to save money.
Thus for creating surplus you need to create a right budget and always stay on it. Find ways to spend less, by prioritizing your expenses. Avoid discretionary spending in order to stay way from debt. The plan to create surplus works out only if you are away from debt.