The act of planning and setting financial limits for spending, savings and investing. Budgeting is used by individuals/households, businesses, organizations and governments of every income level to control expenditures and achieve financial goals.
An individual or household budget typically includes categories like housing, utilities, food and entertainment. In addition, many families include “one-off” expenses like presents and vacations. It’s also helpful to add a category for insurance, including auto and homeowner’s insurance. Some people prefer to group all the bills together under a single category, while others separate them by type of bill (e.g. utilities into one category, groceries into another).
A business budget is often a detailed projection of operational expenses, such as salaries, R&D, marketing, infrastructure and capital expenditures, consolidated into a master budget that promotes accountability and strategic clarity across departments. It can also include long-term investments like facility expansion and acquisitions, with estimates of costs, timelines and ROI to inform decision-making and drive growth.
A Pay-Yourself-First Budget is a personal finance strategy that encourages individuals to allocate a specific percentage of their income toward necessities and debt payments before spending money on things they want or need. This allows people to treat saving and investing as priorities rather than an afterthought, which can help them reach their financial goals more quickly. It’s also a great way to avoid overspending and build a emergency savings fund. This approach can be especially helpful for those who struggle with over-spending and credit card debt.
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