What is a budget?

• A. A written record of past purchases only.
• B. A method for increasing credit limits.
• C. A strategy for investing in stock markets.
• D. A plan that outlines expected income and expenses over a period, used to manage money.

Answer: (D)

A budget is a plan for your money. It outlines how much you expect to earn and how you intend to spend it over a period, typically a month, so you can control spending, save, and reach financial goals. It helps ensure essentials are covered, allocates funds for debt payoff or savings, and shows where you can adjust if spending overruns. It’s not just a record of past purchases—that would be tracking expenses—and it isn’t about raising credit limits or choosing investments. It’s a planning tool for income and expenses that you review and adjust over time.