A plan that allocates expected income across spending categories and savings over a set period, typically a month, used to track and direct where money goes rather than discovering it after the fact.
Without a budget, money tends to just disappear — you know roughly what you earned and roughly what's left, but not where the gap went. A budget flips that: before the month starts, you decide where each dollar is headed (rent, groceries, savings, fun money), then track against that plan. It's less about restriction and more about visibility — you can't intentionally increase your savings rate if you don't know where the money currently goes.
One common approach splits income into roughly 50% needs, 30% wants, and 20% savings — a starting point, not a rule, that many FIRE-focused savers deliberately flip toward a much higher savings percentage.