WalletHub published an article about a fundamental financial question: What is a budget? They explain why budgeting is important, provide examples and suggest budgeting tools. They also interviewed multiple experts on the subject, including Srini Krishnamurthy, associate professor of finance at Poole College.

“People often worry that a budget will restrict their freedom,” says Krishnamurthy. “In reality, your freedom is already limited by the size of your income. Overspending doesn’t grant freedom; it just buys future financial distress or bankruptcy. A budget doesn’t box you in – it highlights the boundaries so you can explore your financial options safely.”

Krishnamurthy was asked about the benefits of having a budget, the downsides and for any tips about creating and sticking to a budget. “The real magic of a budget isn’t just the math; it’s the back-and-forth interaction it creates. It allows a household to compare planned goals with actual reality.”

Read his full thoughts on wallethub.com.