 TITLE: What Is a Budget? CONTENT: How Budgeting Works\n-------------------\nThe word \"budget\" can have a negative connotation and evoke feelings of constraint or restriction. But a budget is merely a tool you can use to take control of your money and make sure your habits match your ambitions.\nTo start, you'll track your income and expenses. You'll also create specific categories for your expenses, which often get split into fixed (or necessary) expenses and variable (or discretionary) expenses.\nYour fixed expenses could include regular bills, such as rent, debt payments, utilities and transportation. Variable expenses could be for entertainment, dining out and other spending you can determine—they're often wants rather than needs.\nThe categories you choose should reflect your goals. For example, if you're focused on increasing your savings, you could create a fixed expense for savings and set aside that money each month before allocating funds to your variable expenses.\nOver time, the amount of money you assign to each category can shift as your income, expenses and needs change. However, you always want your income to be equal to or greater than all your expenses each month. END