Budgeting involves planning spending and saving based on expected future income over a defined period. A good monthly budget helps overcome unexpected expenses and reach financial goals by comparing revenues and expenses. It includes all cash inflows like income, assets, and liabilities, as well as cash outflows like expenses. When creating a monthly budget, one lists total income from sources like salary and investments, then allocates finances to both fixed expenses like housing and flexible expenses like entertainment. The total expenses, including debt payments, should not exceed the monthly income amount. Budgeting can be done for an individual, business, or specific areas like sales.