In a study at Harvard Business School in 1979, business students were asked, “How many of you have set clear, written goals for your future and made plans to accomplish them?” As it turned out: 13 percent had goals but hadn’t put them in writing, 3 percent had specific goals and had put them in writing, 84 percent had no goals at all.

Ten years later, the study was revisited to see how each student was performing in the business world.

• The 13 percent who had made goals were earning about double, on average, of what the 84 percent who had made no goals were earning.
• The 3 percent who wrote their goals were earning ten times as much as the remaining 97 percent put together.

Do you see how this might apply to budgeting? Setting a budget is really about taking facts and figures from your financial life and putting them to paper - or a computer screen - in order to gain better control over your green. Those who budget will have a better idea of their needs and goals than those who don’t.

In these troublesome financial times, budgeting has gained even more importance, because it reveals how often Americans put aside the need to budget in favor of using credit to leverage lives that we might not be able to sustain. Setting a budget is about paying off expenses and debt, and using knowledge to attain the long-term goal of financial independence.

In the Harvard Business School study mentioned above, the people who succeeded were the goal-setters, the people locked onto precise targets of future success. Setting a budget also includes striving toward goals - goals of financial security and long-term planning that will keep your household stable both in the short-term and the distant future.

Additionally, having a budget means looking at your financial situation dispassionately in order to put your feet on solid ground. Even if you’re in the red, having a statement that shows you exactly where you are will help you know exactly the kind of direction you need to head in - where to cut expenditures, how to improve income, and how to leverage what you already have.

Explorers since Christopher Columbus have needed maps to show them not only where they are, but where they’re heading. Consider a budget to be your personal financial map, and even if your long-term goals are merely daydreams at this point, by setting your goals within a budget you’ll finally have a specific map that guides you to where you want to be.