Can someone please explain how the calorie deficit works?

Yes, that's exactly right. If you eat 1300 calories today, and you burn 1500 calories today, you have a 200 calorie deficit.

Now, the thing to remember about this is that if you are trying to create a calorie deficit, you need to understand that your body is burning calories 24 hours a day. So, don't try to burn those 1500 calories in an exercise session. If you do, you'll need to eat more. Google "bmr calculator" and you can get a very rough estimate of how many calories your body burns each day. When you enter the information, enter it without taking into account your workout. You want to know what your body does during the routine day.

Then, if you add in 300 calories of exercise, and subtract 200 calories of food, you'll have a 500 calorie deficit.

500 calories each day adds up to 3500 calories per week. 3500 calories is the accepted number of calories it takes to burn off one pound.

Lastly, if your calorie deficit is too big, your body will go into starvation mode. This forces your body to store every additional calorie it can as fat, and will slow your metabolism. So, try to ensure you don't have too big a deficit. 500-1000 calories a day is the biggest deficit you want.

if you consume less calories that what your body needs to work and function it uses up the glycogen and fat stores so you lose weight.

as a general rule is take 3,000 less per week to lose 1-2 lb

so just say the average person uses 2,000 cals per day, in a week thats 14,000

to lose a steady 1-2 lb you need 3,000 cals less per week, meaning 1100 in a week, that works out at just about 1,500 per day.

so to lose 2 lb per week you need 1,000 cals per day.

that's only an average!