A budget is an estimation of revenues and expenses in a given period of time. Budgeting is one of the most important business activities and is also important in your private finances if you want to think about the future and to save money.
When a budget is established, income and costs are planned. It should be assured that costs do not exceed income. Later on actual results need to be continuously compared against budget plan. Investigation of variances enables remedial action, thus financial health of an entity or a household as well.