A surplus budget occurs when an entity, such as a government or organization, generates more revenue than it spends over a specific period. This means that the income exceeds the expenses, allowing for savings or investment in future projects. A surplus can indicate financial health and effective management of resources. Surplus budgets are often used to pay down debt, fund new initiatives, or save for future needs. For example, a government with a surplus budget might invest in infrastructure or education, benefiting its citizens. This financial strategy can lead to long-term economic stability and growth.