Budget Basics
A budget assigns a purpose to money before it is spent. What varies between methods is how much of the total gets assigned, and at what level of detail.
A budget is a spending plan. It records where money went so the next period can be decided rather than discovered.
It answers three questions
- How much comes in? Total income from every source.
- How much goes out? Fixed costs, variable spending, savings.
- What is the difference? The gap between the two.
Budgets range from one tracked number to a limit on every category. The methods below differ mainly in how much attention they require to stay accurate.
This content is educational and informational only. It is not financial, investment, or tax advice. Consult a qualified professional before making financial decisions.