Question

Explain what a budget is, and outline the main features of a budget.

Answer 1

A budget is a plan for spending and saving money. A budget includes estimates of income from different sources as well as estimated expenses, including both fixed expenses and flexible expenses. The fixed and flexible expenses on a budget should be grouped into categories such as food, clothing, and entertainment. The budget should include a category for "savings," which should be placed under "expenses." The budget should be a realistic one that you can actually follow.