Managing my money
Managing my money

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

Free course

Managing my money

3.1.1 Budgeting – the basics

For most people there’s considerable pressure to spend money on goods and services, yet we all need to avoid debt, to save and to invest for the future. The process of budgeting can help to reconcile competing demands on income. A budget identifies and adjusts income and expenditure flows. It looks forward, to estimate and plan income and expenditure over a future time period.

So how does setting a budget help you manage your household finances?

  • It helps you control spending by comparing your income with your spending.
  • It helps you check that you have enough spare income to pay current and future bills without having to borrow.
  • It enables you to plan on how to meet your goals.

Carrying out a budgeting exercise once is useful to help you to assess whether your spending is under control, but budgeting is most effective in managing finances when you use it as part of an ongoing process.

Next, you see how an income and expenditure profile sheds light on the financial circumstances of a young woman called Jenny.

Figure 1

Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to University-level study, we offer two introductory routes to our qualifications. You could either choose to start with an Access module, or a module which allows you to count your previous learning towards an Open University qualification. Read our guide on Where to take your learning next for more information.

Not ready for formal University study? Then browse over 1000 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus371