Budgeting is the process of creating a plan to manage an individual’s or organization’s financial resources over a specific period. This involves estimating income and expenses, determining how much money is available for spending, and allocating funds to various categories such as necessities, savings, and discretionary spending. The primary goals of budgeting are to ensure that expenditures do not exceed income, to prepare for future financial obligations, and to achieve financial goals. By tracking and analyzing spending patterns, budgeting helps in making informed financial decisions, maintaining financial stability, and preventing overspending. It can be done on various levels, from personal budgeting by individuals to corporate budgeting in businesses and government entities. Overall, effective budgeting is a crucial aspect of financial management that promotes accountability and foresight in resource allocation.
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