What is the Difference Between Budgeting and Spending Plan?

[Suba]

Many people out there use the terms budgeting and spending plan with the same meaning, so we often misunderstand them if we just read the title. These two terms are applied by people to manage and control finances, both personal and business. But when we are going to prepare a budget we need past financial data and information, both income and expenses. So in your opinion, what is the difference between budgeting and spending plan?

 

[Abiodun]

Budgeting is almost the same as spending plan the only difference I can this of is that budgeting is for business only

 

[eLdavis]

Budgeting can also be said to be part of your spending plan. Budgeting is allocating a specific amount for spending on a particular thing.

 

[King Belieal]

Spending plan is a part of your budget. It shows how you plan to utilize the part that you have set aside for expenses.

 

[Fire&Rain]

Honestly, I see budgeting as more strict ,like it’s based on what you already earned and spent. A spending plan feels more chill, like “here’s how I hope to use my money.” I try to use both so I don’t end up broke by mid-month.

 

[Augusta]

A budget is often viewed as restrictive whereas a spending plan is created from awareness, knowledge and intention.

 

[Suba]

After I asked a financial expert, I just understood the difference between budgeting and spending plan/expense plan which lies in the purpose and scope, budgeting is more focused or aimed at estimating income and expenses and how funds are allocated to various spending goals, while spending plan is more focused on how money will be spent to meet needs and desires, more detailed on each type of expenditure that will be made, how much money should be allocated to each expenditure post, when it will be spent.