What Is Budget? Meaning & Example
Definition
A budget is a plan for how you will spend, save and invest your income. It helps you direct money toward your priorities instead of wondering where it went.
Related terms
An emergency fund is cash set aside for unexpected expenses such as job loss, medical bills or urgent repairs. Many people aim for three to six months of essential expenses.
Net WorthNet worth is the value of everything you own minus everything you owe. Tracking it over time shows overall financial progress.
Opportunity CostOpportunity cost is the value of the next-best alternative you give up when making a choice. It reminds you that every dollar spent could have been used another way.
What is Budget?
A budget is a plan for how you will spend, save and invest your income. It helps you direct money toward your priorities instead of wondering where it went.
Can you give an example of Budget?
A 50/30/20 budget splits take-home pay into needs, wants and savings.