When budgies puff up, it can indicate various things. It is a common behavior for regulating body temperature, with puffing up used to conserve heat when it is cold and to release excess heat when it is hot. Puffing up can also be a sign of relaxation and contentment, especially when they are at rest or preparing to sleep. On the other hand, if budgies puff up in response to stress or fear, it may signify discomfort or anxiety. Therefore, understanding the context and accompanying behaviors is key to interpreting why budgies puff up.