Define what a budget surplus is.

A budget surplus occurs when income exceeds expenses within a specified period, typically over a fiscal year. In this scenario, the funds remaining after all expenses have been paid can be directed towards savings, investments, or debt repayment, enhancing the financial health of an individual or organization. This concept is crucial in personal finance, corporate budgeting, and governmental fiscal policies, as a budget surplus reflects prudent financial management and the potential to fund future projects or cushion against future financial difficulties.

In contrast, the other options describe different financial situations, such as a deficit, where expenses outpace income, or a balanced budget, where income and expenses are equal. The idea of savings being higher than investment does not directly relate to the definition of a budget surplus, making it not applicable in this context.