Simple Definition:
A budget is a plan that helps you manage your money [finances] by setting limits on how much you can spend on different things. It shows how much money you have coming in and how much you are spending.
For example, let’s say you make $1,000 a month. Your budget might look like this:
- Rent: $400
- Groceries: $200
- Transportation: $100
- Entertainment: $100
- Savings: $200
This means that you have allocated $400 for rent, $200 for groceries, $100 for transportation, $100 for entertainment, and $200 for savings. By following your budget, you can make sure that you don’t spend more money than you have and prioritize your expenses.
Very Simple Definition:
A budget is a plan that helps you handle your money [finances] by deciding how much you can spend on different things. It shows how much money you have and how you use it.
For example, if you get $1,000 every month, your budget might look like this:
- Rent: $400
- Groceries: $200
- Entertainment: $200
- Savings: $200
This means you’re setting aside $400 for rent, $200 for groceries, $200 for entertainment, and $200 for savings. Following your budget helps you not spend too much and pick what’s important.