A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Budgets can be made for a person, a group of people, a business, a government, or just about anything else that makes and spends money.
Lifestyle inflation refers to an increase in spending when an individual's income goes up. Lifestyle inflation tends to become greater every time an individual gets a raise and can make it difficult to get out of debt, save for retirement or meet other big-picture financial goals. Lifestyle inflation is what causes people to get stuck in a cycle of living pay check to pay check where they have just enough money to pay the bills every month.
Creating a budget is one of the simplest and most effective ways to control your spending, saving and investing. You can't begin or improve your financial health if you don't know where your money is going, so start tracking your expenses vs. your income, then set clear goals.
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