[Glossary](https://pecuvo.eu/en/glossary/) · Budgeting and saving # Personal budget **In short:** A personal budget is a plan of how much money comes in and where it will go over a period — for example a month — regularly compared with what actually happened. **Simply put:** A budget is not a ban but a choice: you decide in advance where the money goes, instead of wondering afterwards where it went. It has three columns — plan, actual and difference. Start with 4–6 categories (food, transport, leisure, savings, unexpected), not 40: more categories bring fatigue and giving up. Saving is a line in the budget, not whatever is left over. **Example:** You planned €400 for food and actually spent €460. The €60 difference is not a punishment but information: next month you either raise the plan or find where the money leaks. **Watch out:** If one category goes over the plan every month, the plan may be wrong, not you. And the myth "budgets are for people who have no money": a budget is for people who want to decide for themselves. **Source:** European Commission and OECD/INFE, financial competence framework for adults (2022) — https://finance.ec.europa.eu/publications/commission-and-oecd-infe-publish-joint-framework-adults-improve-individuals-financial-skills_en ## In depth in the modules - [Module 9](https://pecuvo.eu/en/modules/managing-cash-flow/) - [Module 8](https://pecuvo.eu/en/modules/the-iron-principles-of-cash-flow/) ## Related terms - [50/30/20 rule](https://pecuvo.eu/en/glossary/50-30-20-rule/) - [Cash flow](https://pecuvo.eu/en/glossary/cash-flow/) - [Separate accounts (envelope method)](https://pecuvo.eu/en/glossary/envelope-method/) - [Financial goal](https://pecuvo.eu/en/glossary/financial-goal/) - [Subscriptions](https://pecuvo.eu/en/glossary/subscriptions/)