Budgeting is the best strategy for managing money. For the consumer or family, the budget is a tool for managing household expenses. For the organization, the development of a budget is much more political. A budget contains the priorities of the organization for spending. Individuals and families can learn some principles of money management by learning the budgeting practices of organizations.
Purpose of a Budget
The development of a budget helps the user track income, calculate how much can be paid for each recurring expense, calculate how to afford one-time expenses and how to allocate money for investments and savings plans. In an organization, a budget document reflects the institutional priorities for the year. In a consumer budget, there might be less planning, but the consumer still has to assign priorities to each budget item.
Money Management and Family Disagreements
In the "Pocket Idiot's Guide to Living on a Budget," authors Jennifer Basye Sander and Peter J. Sander explain the basics of money management. Household money management is one of the most common sources of disagreement in marriages. One USA Today article reported that 70 percent of married couples argued about money issues, with the use of credit and shopping and spending habits topping the list.
Free Money Management Advice
The Beehive offers consumers free money-management tools, including a tool for building a budget online. When consumers use a budget to plan how to spend and save their money, they encounter fewer problems in paying bills on time and repaying consumer debt such as credit cards and loans.
Government Assistance in Budgeting
Consumers can also turn to local, state or federal agencies for free money management tips. For example, following the collapse of the housing market in 2008, government agencies focused on providing debt counseling to consumers through outreach counselors such as small business development counselors in local development agencies.
Free Financial Advice from Commercial banks
Many banks and financial institutions in the United States offer free financial advice to customers, including how to manage money through direct deposit to savings and investments. Money management advice can be obtained by making an appointment with a bank's financial representative. Although banks use this service to attract new applicants for loans and other programs, a consumer can stop at the free advice with no obligation to join any new programs in most banks and credit unions.