An income budget is a plan that outlines the amount of money you expect to receive during a specific period, such as your salary, business income, interest, or other earnings. It helps you understand how much money you’ll have to manage your finances.
An expense budget, on the other hand, is a plan for how much money you expect to spend during that same period. It includes categories like rent, groceries, bills, and entertainment. This helps you control your spending and avoid going over your limits.
In short:
- Income budget = what you plan to earn
- Expense budget = what you plan to spend
| Having both budgets in place gives you a clear picture of your cash flow and helps you make informed financial decisions. |
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