Why is using gross pay not recommended and net pay is recommended when preparing a budget?

Using gross pay is not recommended for budgeting because it represents total earnings before deductions, which can create an inaccurate picture of available funds. Net pay, on the other hand, reflects the actual amount received after taxes and other deductions, providing a more realistic basis for financial planning. By budgeting based on net pay, individuals can better manage expenses and avoid overspending. Ultimately, focusing on net pay helps ensure that budgets align with true financial capacity.