What is a budget?

• A. A plan that shows how much money you expect to earn and spend.
• B. A plan for debts.
• C. A plan for meals.
• D. A plan for investments.

Answer: (A)

A budget is a plan for how much money you expect to earn and how much you expect to spend. It helps you decide in advance where your money goes, whether you’re saving for something you want, paying for needs, or setting aside money for later. By listing income and expenses, you can see if you’re spending more than you earn and make adjustments before you run out of money. This planning helps you reach goals, like saving for a bike. It isn’t just about debts, meals, or investments; it covers all money coming in and all money going out. For example, if you get a weekly allowance, your budget might set aside some for savings, some for snacks, and some for a small purchase, guiding your choices so you stay on track.