Which of the following best describes budgeting?

Budgeting is best described as establishing a plan for spending and saving money because it involves creating a structured approach to managing finances. This includes assessing income, determining necessary expenses, and identifying savings goals. By planning how to allocate funds, individuals can better control their financial situation, prioritize their spending, and work towards financial objectives.

In contrast, investing in stocks and bonds revolves around putting money into different financial instruments with the expectation of generating returns, which is a different aspect of personal finance. Evaluating stock market trends focuses on analyzing market data to make informed investment decisions rather than directly managing personal cash flows. Calculating interest on loans relates specifically to understanding the cost of borrowing, which is a part of the overall financial picture but does not capture the comprehensive approach of budgeting as a whole.