Final answer:
The basis of money management is budgeting, which is a key component in ensuring income is appropriately allocated to cover expenses and achieve financial goals. It assists in all aspects of personal finance, from investment strategies to managing debt, saving, and improving credit scores. The main component of money management that provides the basis of money management is C. budgeting.
Step-by-step explanation:
Budgeting involves creating a plan for how you are going to spend your money. This financial plan, or budget, helps to ensure that there will be enough income to cover all expenses and to make decisions about allocating funds to different areas. It allows for setting up guidelines and priorities that can help avoid debt and plan for the future. Budgeting is essential in personal financial literacy and is a critical step in achieving financial goals and providing for basic needs while living within one's means.
For instance, by assessing ways to be a wise investor or effectively starting a savings program, budgeting plays a fundamental role. Similarly, when maintaining a checking account or evaluating the costs of various financial options such as loans, insurance, or even charitable giving, a solid budget is an indispensable tool. The creation of a budget supports the development of strategies to become a low-risk borrower and improve one's personal credit score.