Barbara O'Neill, Ph.D., CFP®
Distinguished Professor and Extension Financial Management Specialist Emeritus
Rutgers Cooperative Extension
One of the best small steps that people can take to improve their finances is to prepare (and follow) a budget. Budgeting is a fundamental financial planning practice and, without a budget, it is hard to manage other aspects of personal finance including credit, insurance, saving, investing, and achieving goals such as a new car or a comfortable retirement. Financial goals cannot be achieved if there is no money set aside for them.
Budgeting has also been found in research to be associated with performance of positive health and financial practices. People who budget their money may be inclined to “budget” their calories and self-restrict their food consumption and/or adjust their physical activity to stay within their daily calorie “allowance.”
Below are nine key things to know about budgeting:
To create your own personal budget, take these two steps. First, track your income and expenses for a month or two to get accurate data about your current income and expenses. Next, use this Spending Plan Worksheet from Rutgers Cooperative Extension to create a future plan to manage your money.