A budget is a detailed accounting of income and expenses during a given period of time, usually by month. Budgets help us track how much money we spend and compare it to how much money we have coming in.
It’s as simple as: Income – Expenses
The answer is, it depends! Are you trying to plan for the future, or are you trying to figure out where your money actually went? Ideally, you will use both budgets together for the greatest success.
|Projected Budget||Actual Budget|
|Picture of the future based on estimated income and expenses – what you THINK you’ll spend.
This budget creates a baseline for future planning but needs to be updated as your financial picture changes.
|Based on actual income and expenses for a set time period – what you ACTUALLY spent.
This budget provides a look backwards and needs to be updated and tracked to be of the most use.
|Use this budget when:
||Use this budget when: