Budgeting
Managing Money
What is Budgeting?
Budgeting is the process of creating a plan to spend your money. Budgeting is helpful for many people in their daily lives. It helps people to spend more wisely and save wisely.
Types of Budgeting
Zero-Based Budget
The goal is that your income minus your expenditures equals zero by the end of the month.
Activity-Based Budget
Money will be generated after the total cost of activity is counted.
Difference
Zero- Based Budget, you have no worries of overspending, because this method of budgeting is based on what money you already have
Activity- Based Budget, this method of budgeting is a little risky, because you can overspend, this method creates the budget before getting the money needed.
*Inflation: a general increase in prices and fall in the purchasing value of money.