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Contributor

Gail Cunningham serves as vice president of membership and public relations for the National Foundation for Credit Counseling (NFCC), Inc. based in Washington, D.C. During over two decades in the industry, she has provided one-on-one financial counseling to thousands of consumers, and reached tens of thousands more through hosting television shows related to consumer education on cable and network television, as well as writing a weekly financial education column that appeared in multiple newspapers and online sites. She has been a featured financial expert for the nation’s top media outlets, including: NBC Nightly News, Good Morning America, the New York Times, the Washington Post, CNN, National Public Radio, USA Today, Newsweek, Forbes, Smart Money, MSN Money, Bankrate.com, the Associated Press, FOX Business Network and Bloomberg News.

National Foundation for Credit Counseling

Confused Over the Purpose of a Budget?

Cash inside of a glass jar.

A recent poll on the National Foundation for Credit Counseling (NFCC) website revealed that 57 percent of respondents misunderstand the purpose of a budget, viewing it as a restriction on their spending, when in fact, just the opposite is true.

 A budget actually provides the structure through which a person can be in charge of his or her spending, directing the dollars to their best use. Spending should be a reflection of a person's priorities, but without a plan, the priorities often get pushed aside in favor of the tyranny of the urgent.

The reluctance to construct a budget suggests that people may be afraid to face the financial facts, choosing instead to allow the most pressing need or want of the moment to make the decision for them.  Instead, the NFCC reminds consumers that a spending plan includes the following benefits:

  • Creates a thoughtful awareness of spending
  • Relieves financial stress
  • Increases financial security
  • Helps structure a plan for the future
  • Allows planning for large purchases
  • Assists in meeting financial goals
  • Frees up money to designate for savings
  • Uncovers money available to invest
  • Allows preparation for emergencies
  • Avoids late payments through scheduling timely payments
  • Finds hidden money for debt repayment
  • Potentially raises the credit score

Instead of being restrictive, a budget often creates more money due to smart spending choices.  If financial freedom is the goal, a spending plan is the tool that starts the process.

 It's a shame that budgeting has a negative connotation. Everyone needs a spending plan, but when times are tough, a budget is even more critical. When every penny counts, it's important to count every penny.

The first step to being in charge of your money is to track spending for at least one month. To get started, the NFCC offers a free budget worksheet which is available at http://www.nfcc.org/FinancialEducation/monthlyincome.cfm.

For professional help creating a customized budget, reach out to a trained and NFCC certified financial professional at an NFCC Member Agency. To find the agency closest to you, call (800) 388-2227, or go online to www.DebtAdvice.org. For assistance in Español call (800) 682-9832.

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Contributor

Gail Cunningham serves as vice president of membership and public relations for the National Foundation for Credit Counseling (NFCC), Inc. based in Washington, D.C. During over two decades in the industry, she has provided one-on-one financial counseling to thousands of consumers, and reached tens of thousands more through hosting television shows related to consumer education on cable and network television, as well as writing a weekly financial education column that appeared in multiple newspapers and online sites. She has been a featured financial expert for the nation’s top media outlets, including: NBC Nightly News, Good Morning America, the New York Times, the Washington Post, CNN, National Public Radio, USA Today, Newsweek, Forbes, Smart Money, MSN Money, Bankrate.com, the Associated Press, FOX Business Network and Bloomberg News.

National Foundation for Credit Counseling

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