Actual Spending Definition

Published Dec 23, 2022

Definition of Actual Spending

Actual spending is defined as the amount of money that is actually spent on goods and services (i.e., ex post). That means it is the amount of money that is actually exchanged for goods and services, as opposed to the amount of money that is budgeted or planned to be spent.

Example

To illustrate this, imagine a family of four that has a budget of USD 500 per month for groceries. That means they plan to spend USD 500 on groceries each month. However, at the end of the month, they actually spent USD 600 on groceries. In this case, the actual spending is USD 600, while the budgeted spending is USD 500.

Why Actual Spending Matters

Actual spending is an important concept for understanding the economy and making financial decisions. Understanding the difference between budgeted and actual spending is important, as it can help you make better decisions about how to allocate your resources. For example, if you are budgeting for a vacation, it is important to understand how much you are actually spending on the trip instead of how much you planned to spend. This will help you ensure you stay within your budget and not overspending.

Important Disclaimer: This definition was written by Quickbot, our artificial intelligence model trained to answer basic questions about economics. While the bot provides adequate and factually correct explanations in most cases, additional fact-checking is required. Use at your own risk.