The main purposes of a budget are:
1. To record past income and spending: Budgets help individuals and businesses track their past income and expenses. By keeping a record of how money has been earned and spent, they can gain insights into their financial habits and make informed decisions about future spending.
2. To plan future income and spending: Budgets are essential for setting financial goals and making plans for the future. By creating a budget, individuals and businesses can allocate their income to different categories, such as savings, investments, bills, and discretionary spending. This helps them prioritize their expenses and ensure that they have enough money for their needs and wants.
3. To balance available resources and expenses: A budget helps individuals and businesses balance their available resources, such as income and savings, with their expenses. By carefully planning and monitoring their spending, they can avoid overspending and ensure that they are living within their means. This allows them to make informed decisions about how to allocate their resources effectively.
These are the three main purposes of a budget: recording past income and spending, planning future income and spending, and balancing available resources and expenses. Budgets provide a framework for financial management and help individuals and businesses make informed decisions about their finances.
I hope this helps you. :)