Budget

Definition

A budget is a financial plan for a defined period, often one month or a year. It estimates your income and expenses, allowing you to plan how to spend your money. Budgeting is a fundamental step in managing your money and achieving your financial goals.

Example

You create a monthly budget where you track your $4,000 in income against your planned expenses: $1,500 for rent, $400 for groceries, $200 for transportation, and so on. This helps ensure you don't spend more than you earn.