What is a budget?

A budget is a financial plan that outlines expected income and expenses over a specific period of time, usually a month, quarter, or year. It is a tool used by individuals, households, businesses, and governments to manage their finances and allocate resources effectively.

A budget typically includes all sources of income, such as salaries, wages, and investments, as well as all expenses, such as rent or mortgage payments, utilities, groceries, transportation costs, and entertainment expenses. The purpose of a budget is to help individuals or organizations to identify areas where they can reduce spending, increase savings, or allocate resources more efficiently. By following a budget, people can also ensure that they are living within their means and not overspending, which can lead to financial difficulties.