Confused Over the Purpose of a Budget?

July 9th, 2013

Poll Reveals Consumers Confused Over Purpose of a Budget 

Washington, DC - 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," said Gail Cunningham, spokesperson for the NFCC.  "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, and
  •          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," continued Cunningham.  "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

For professional help creating a customized budget, reach out to a trained and certified counselor at an NFCC Member Agency, like Consumer Credit Counseling Service.  Call (423) 490-5620 or click here to learn more! 

The actual poll question and answer results are below:

I consider a monthly budget to be…

    1.     A restriction on how I choose to spend my money = 57%
    2.     A freedom allowing me to spend my money as I have chosen = 43%

Note: The NFCC's June Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site ( from June 1 - 30, 2013 and was answered by 793 individuals. 

The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help millions of consumers through close to 700 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit


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