What is the primary purpose of a budget?

The primary purpose of a budget is to plan and control financial resources. A budget is essentially a financial plan that outlines expected income and expenses over a certain period. By creating a budget, individuals can allocate their resources effectively to meet their essential needs, save for future goals, and avoid overspending.

This planning process helps in prioritizing necessary expenses, identifying areas where spending can be reduced, and ensuring that financial goals such as saving for emergencies or retirement are met. Through effective budget management, individuals can maintain control over their financial situation, minimize the risk of accumulating debt, and foster better decision-making regarding money management.