What is a plan for managing income and expenses during a certain period called?

• A. Financial plan
• B. Budget
• C. Forecast
• D. Expense report

Answer: (B)

A budget is specifically designed to manage income and expenses over a defined period, typically a month or a year. It serves as a financial plan that outlines expected income and allocates funds for various expenditures, helping individuals or organizations track their spending to ensure they do not exceed their available resources.

Creating a budget allows for proactive financial management by providing clarity on how much money is coming in and going out. This structured approach enables individuals to set financial goals, save for future needs, and make informed spending decisions. By comparing actual expenses against the budget, it is possible to identify areas where adjustments may be needed, promoting better financial habits and long-term stability.