What is a budget?

A budget is fundamentally a financial plan that outlines expected income and expenses over a specific period, allowing individuals or organizations to manage their finances effectively. This structured approach enables one to track where money is coming from and going, making it possible to allocate resources based on priorities and goals.

By laying out both income sources and anticipated costs, a budget helps in identifying potential shortfalls or surpluses, thus facilitating better decision-making regarding spending, saving, and investing. It serves as a crucial tool for achieving financial stability and can guide future financial decisions more efficiently.

While the other options do touch on aspects of personal finance, they do not encapsulate the comprehensive nature of what a budget is. For instance, a plan for savings and investments focuses primarily on growth rather than the broader financial picture, a record of past financial activities does not provide a forward-looking strategy, and a list of financial goals lacks the detailed structure of expected income and expenses needed for practical application.