What does the term "affordable method" refer to in budgeting?

The term "affordable method" in budgeting refers to the concept of determining spending based on what is left after all other expenses have been accounted for. This approach emphasizes the availability of funds rather than fixed allocations or detailed projections. Essentially, it focuses on what an organization can afford to spend on marketing after fulfilling its other financial obligations.

Using the affordable method, a business typically reviews its overall budget and identifies how much can be allocated to marketing after all essential costs have been covered. This can sometimes lead to unpredictability in marketing strategies, as funds may vary from period to period depending on the organization’s financial situation.

In contrast, the other methods presented provide different frameworks: fixed budgets rely on predetermined spending, calculated budgets are based on expected performance metrics, and leading industry averages suggest spending based on standard practices within the sector rather than individual financial capacity.