UTXO Model
In the UTXO model (used by Bitcoin), your balance is the sum of unspent "coins" received in earlier transactions.
In depth
UTXO stands for Unspent Transaction Output. Like cash, you cannot spend part of a note — you hand over whole outputs and receive change back as a new output. A wallet balance is simply the total of all outputs addressed to you that have not yet been spent.
Why it matters
It explains why Bitcoin transactions have "change" and why fees depend on data size rather than amount.