The first two steps in budgeting are

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The first step in budgeting is to determine what you make, which involves calculating your income from all sources. The second step is to determine what you spend, which involves tracking your expenses and creating categories for them. Only then can you create a budget plan that aligns your spending with your income. Options A and B are incorrect because they imply that spending is deducted from income, whereas budgeting involves examining both. Option D is incorrect because it jumps straight to reducing spending without first considering the bigger financial picture.

The First Two Steps in Budgeting Are