The Budgeting Process (1281)

"Budget" is a word that often gets negative reactions. It’s like "diet." People still tend to think of cutting back and deprivation. A budget can help you use the money you have more effectively. It is a financial plan for spending, not a bookkeeping chore of tracking every penny.

Budgeting is a management process, and includes the following nine steps.

1. Communicating among family members about financial needs and goals

2. Considering personal or family situations (e.g., household income)

3. Setting goals

4. Estimating income

5. Estimating expenses

6. Balancing the budget (i.e., income = expenses)

7. Putting the budget into action

8. Adjusting the budget as necessary

9. Using the budget as a guide for future planning

The next time you hear the word "budget," think of all its advantages. Research studies have shown that people with financial plans generally manage their money more successfully than others.

For more information on this subject, Please visit the College of Agricultural Sciences Publications Web site.

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