A budget is basically a spending plan. It shows how you will be spending your income, and on what. And therefore budgeting is the process of planning your spending according to your expected income.
A budget usually consists of expenses that you are required to pay monthly or annually. It includes things such as groceries, rent, car installments, insurance payments, gym membership etc. As for groceries, one should estimate according to how many people there are in the house, children, adults, and babies and so on.
The list has all the things that you pay for every month depending on how you earn your salary, the list can also have all the money you will make considered as an income. A budget can help you see how much money you have left after paying all necessary expenses.
Why you need a Budget
If you want to stay out of debt and stay financially stable, BUDGET. A good budgeting plan can help you save a lot of money. Budgeting helps you keep up with your payments.
Budgeting helps you spend according to your priorities. It creates an overall picture of your finances which makes it easy to actively eliminate debts and build up your wealth. You are then put in a habit of always putting some of your money away towards your debt.
Not having a budget can become frustrating in that you would never know if you have enough money for anything. Having a budget makes it harder to fool yourself or justify buying something you do not need.