Spending refers to the act of using money to purchase goods and services. It is a fundamental part of personal finance and affects both individuals and businesses. When people spend money, they exchange it for items they need or want, such as food, clothing, or entertainment. In economics, spending can influence the overall economy. When consumers increase their spending, it can lead to higher demand for products, which may boost production and create jobs. Conversely, reduced spending can slow economic growth. Understanding spending habits is essential for effective budgeting and financial planning.