What's an
HOA Budget?
An association's budget is, essentially, an estimate of the association's income and expenses for the
year. It reflects an association's policy decisions (as proposed and approved by the board in many cases)
regarding the programs and services that'll be completed during the budget year. The budget for the
association, like a personal budget, provides a blueprint that balances income and expenses. Here are
five commonly used budgeting terms and definitions:
Budget: The financial plan for an association that estimates income and expenses for a specific period.
Balance Sheet: The balance sheet is the report that reflects the association's financial condition.
Subtracting the dollar amount of liabilities from the value of its assets calculates the
association's net worth.
General Ledger: The general ledger contains
the accounting record for each transaction
in numerical order (chart of accounts) and
occurrence (date order).
Reserves: The funds set aside by a community
association for the future repair of, replacement
of, or additions to major components the
association is obligated to maintain.
Statement of Income and Expense: A
management report that informs the association
whether their actual spending is staying within
the yearly budget (i.e., projected income to date
and projected expenses to date).
