What is the main purpose of a budget?

A budget primarily serves to outline expected income and expenditures over a specific period, allowing individuals or organizations to plan their financial activities effectively. This involves setting financial goals and allocating resources accordingly, which helps in managing spending, saving, and investing. By doing so, a budget provides a clear picture of one’s financial situation, enabling better decision-making and ensuring that funds are available for necessary expenses and future plans.

The other options do not accurately capture the essence of a budget. Keeping track of expenditures without planning does not involve the proactive steps of forecasting income or expenditures necessary for effective budgeting. Estimating future investments in stocks and bonds focuses on a specific aspect of finance rather than the comprehensive overview provided by a budget. Providing financial assistance from the government is unrelated to the personal financial management aspects that a budget addresses.