What is the primary purpose of a budget?

The primary purpose of a budget is to help individuals manage their income and expenses. A budget serves as a financial plan that outlines how much money a person expects to earn and how much they plan to spend over a specified period. This process is crucial for achieving financial stability and ensuring that spending aligns with income, enabling individuals to make informed decisions about their finances. By setting limits on various spending categories, individuals can prioritize their needs, save for future goals, and avoid accumulating debt, ultimately leading to better overall financial health.

In the context of the other options, tracking investments for wealth building is an important aspect of personal finance, but it is a more specific function that comes after establishing a budget. Monitoring stock market trends may inform investment decisions, yet it is unrelated to the basic function of managing everyday income and expenses. Likewise, calculating loan interest rates is a technical financial task that is part of borrowing but doesn't encompass the broader financial management that a budget facilitates.