Which of the following assists in reorganizing finances to reduce debt or increase savings?

Budgeting is an effective tool for assisting individuals in reorganizing their finances to reduce debt or increase savings. It involves creating a plan that outlines income and expenses, which helps individuals understand where their money is going and identify areas where they can cut back. By tracking spending and setting limits in various categories, individuals can prioritize paying off debts and allocating funds toward savings. Budgeting empowers people to take control of their financial situation and make informed decisions about their resources, ultimately leading to improved financial stability and security.

In contrast, financial planning encompasses a broader strategy that includes budgeting but also takes into consideration investment strategies, retirement planning, and insurance needs. While investment strategies can help grow wealth over time, they do not directly address immediate debt reduction or savings increases. Debt consolidation specifically focuses on combining multiple debts into a single payment, simplifying repayments but not necessarily addressing the underlying financial habits that budgeting does.