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705-805 Level|   Non-Math Related|         
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Can financial budgeting help individuals avoid debt? 26 May 2024, 02:14
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Can financial budgeting help individuals avoid debt?

(1) Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning.

(2) To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability.


ID: 700331

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Source: Official Guide 2024-25 (Data Insight Review)
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D
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Can financial budgeting help individuals avoid debt? 01 Jun 2024, 02:08
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Can financial budgeting help individuals avoid debt?

(1) Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning.

(2) To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability.


Show Spoiler
Source: Official Guide 2024-25 (Data Insight Review)
­
­OFFICIAL EXPLANATION
Inference

(1) The claim that many individuals struggle with mounting debt due to excessive spending resulting from lack of financial planning implies that they might not struggle with mounting debt if they did use financial planning to avoid excessive spending; that is, if they practiced financial budgeting. In other words, Statement (1) implies that financial budgeting could help these individuals avoid the mounting debt that they struggle with. Thus, Statement (1) alone entails that financial budgeting can help in avoiding debt; SUFFICIENT.

(2) The claim that individuals should practice responsible budgeting in order to avoid taking out loans implies that responsible budgeting can help them avoid taking out loans. Assuming that in at least some of these cases, avoiding taking out a loan can allow one to avoid the debt from that loan, this means that responsible financial budgeting can help in avoiding debt. Thus, Statement (2) alone entails that financial budgeting can help in avoiding debt; SUFFICIENT.

The correct answer is D; each statement alone is sufficient.
 
Show more
I may differ with statement 1 on being sufficient alone due to two reasons:-
(1) The main statement talks of avoiding debt in totality, while statement 1 talks of mounting debt. Remember so many times we went wrong in CR because of the changed goal posts.
(2) Even if the difference stated above can be disregarded, the main statement talks of individuals ( does not speak of few individuals or many individuals ) while statement 1 talks of many individuals meaning there will be few who will not fit in here. Again remember CR!!

Surely statement 2 should be sufficient here.

May be I am reading too much into it but just jotting down the points that would come to my mind immediately if it were to come in actuals.­
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Can financial budgeting help individuals avoid debt? 01 Jun 2024, 01:13
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@nisen20 It doesn't matter what anyone thinks... The source of the question wouldn't change by someone's thinking something. The source of this question is OG Data Insight review 2024-25. :)­

Screenshot attached for reference though... so that you can be careful while making unhealthy remarks about someone on a serious public platform meant to help serious learners such as you  :)­
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If speculating that the source of the question is not the official guide and believing it to be the company who posted the question is considered an 'unhealthy remark,' then you guys should really work on the quality of your questions. It's funny that you were offended by such a simple comment.
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Can financial budgeting help individuals avoid debt? 26 May 2024, 11:24
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Can financial budgeting help individuals avoid debt?

(1) Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning.

(2) To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability.


Show Spoiler
Source: Official Guide 2024-25 (Data Insight Review)
­
Show more
­OFFICIAL EXPLANATION
Inference

(1) The claim that many individuals struggle with mounting debt due to excessive spending resulting from lack of financial planning implies that they might not struggle with mounting debt if they did use financial planning to avoid excessive spending; that is, if they practiced financial budgeting. In other words, Statement (1) implies that financial budgeting could help these individuals avoid the mounting debt that they struggle with. Thus, Statement (1) alone entails that financial budgeting can help in avoiding debt; SUFFICIENT.

(2) The claim that individuals should practice responsible budgeting in order to avoid taking out loans implies that responsible budgeting can help them avoid taking out loans. Assuming that in at least some of these cases, avoiding taking out a loan can allow one to avoid the debt from that loan, this means that responsible financial budgeting can help in avoiding debt. Thus, Statement (2) alone entails that financial budgeting can help in avoiding debt; SUFFICIENT.

The correct answer is D; each statement alone is sufficient.
­
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Can financial budgeting help individuals avoid debt? 26 May 2024, 20:50
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i think this one is from GMATinsight official.
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Can financial budgeting help individuals avoid debt? 27 May 2024, 00:12
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@nisen20 It doesn't matter what anyone thinks... The source of the question wouldn't change by someone's thinking something. The source of this question is OG Data Insight review 2024-25. :)­

Screenshot attached for reference though... so that you can be careful while making unhealthy remarks about someone on a serious public platform meant to help serious learners such as you  :)­
Attachments

Screenshot 2024-05-27 at 12.43.53 PM.png
Screenshot 2024-05-27 at 12.43.53 PM.png [ 369.56 KiB | Viewed 10143 times ]

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Can financial budgeting help individuals avoid debt? 20 Jun 2024, 01:54
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­Statement (1): Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning.

This statement suggests that a lack of financial planning (and hence budgeting) leads to excessive spending, which in turn results in mounting debt. It implies that if individuals engaged in financial planning (including budgeting), they might avoid the excessive spending that leads to debt. Therefore, this statement alone suggests that financial budgeting can help individuals avoid debt. So, this statement alone is sufficient.
 
Statement (2): To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability.

This statement explicitly states that practicing responsible budgeting helps individuals avoid taking out loans ==> can help individuals avoid debt. So, this statement alone is sufficient.

==> Answer is D­
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Can financial budgeting help individuals avoid debt? 20 Jun 2024, 20:06
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GMATinsight

GMATinsight
Can financial budgeting help individuals avoid debt?

(1) Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning.

(2) To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability.


Show Spoiler
Source: Official Guide 2024-25 (Data Insight Review)
­
­OFFICIAL EXPLANATION
Inference

(1) The claim that many individuals struggle with mounting debt due to excessive spending resulting from lack of financial planning implies that they might not struggle with mounting debt if they did use financial planning to avoid excessive spending; that is, if they practiced financial budgeting. In other words, Statement (1) implies that financial budgeting could help these individuals avoid the mounting debt that they struggle with. Thus, Statement (1) alone entails that financial budgeting can help in avoiding debt; SUFFICIENT.

(2) The claim that individuals should practice responsible budgeting in order to avoid taking out loans implies that responsible budgeting can help them avoid taking out loans. Assuming that in at least some of these cases, avoiding taking out a loan can allow one to avoid the debt from that loan, this means that responsible financial budgeting can help in avoiding debt. Thus, Statement (2) alone entails that financial budgeting can help in avoiding debt; SUFFICIENT.

The correct answer is D; each statement alone is sufficient.

 
I may differ with statement 1 on being sufficient alone due to two reasons:-
(1) The main statement talks of avoiding debt in totality, while statement 1 talks of mounting debt. Remember so many times we went wrong in CR because of the changed goal posts.
(2) Even if the difference stated above can be disregarded, the main statement talks of individuals ( does not speak of few individuals or many individuals ) while statement 1 talks of many individuals meaning there will be few who will not fit in here. Again remember CR!!

Surely statement 2 should be sufficient here.

May be I am reading too much into it but just jotting down the points that would come to my mind immediately if it were to come in actuals.­
Show more
­I think the reason why D is the answer is because the stem asks if financial budgeting CAN HELP avoid debt. 

And the fact that "Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning." implies that if they start financial budgeting, individuals would not be in mounting debt even if they aren't able to avoid it completely. And that surely is HELPING them avoid debt.

Please advice if my approach is flawed. 
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Can financial budgeting help individuals avoid debt? 20 Jun 2024, 21:01
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chetan2u

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GMATinsight
Can financial budgeting help individuals avoid debt?

(1) Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning.

(2) To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability.


Show Spoiler
Source: Official Guide 2024-25 (Data Insight Review)
­
­OFFICIAL EXPLANATION
Inference

(1) The claim that many individuals struggle with mounting debt due to excessive spending resulting from lack of financial planning implies that they might not struggle with mounting debt if they did use financial planning to avoid excessive spending; that is, if they practiced financial budgeting. In other words, Statement (1) implies that financial budgeting could help these individuals avoid the mounting debt that they struggle with. Thus, Statement (1) alone entails that financial budgeting can help in avoiding debt; SUFFICIENT.

(2) The claim that individuals should practice responsible budgeting in order to avoid taking out loans implies that responsible budgeting can help them avoid taking out loans. Assuming that in at least some of these cases, avoiding taking out a loan can allow one to avoid the debt from that loan, this means that responsible financial budgeting can help in avoiding debt. Thus, Statement (2) alone entails that financial budgeting can help in avoiding debt; SUFFICIENT.

The correct answer is D; each statement alone is sufficient.

 
I may differ with statement 1 on being sufficient alone due to two reasons:-
(1) The main statement talks of avoiding debt in totality, while statement 1 talks of mounting debt. Remember so many times we went wrong in CR because of the changed goal posts.
(2) Even if the difference stated above can be disregarded, the main statement talks of individuals ( does not speak of few individuals or many individuals ) while statement 1 talks of many individuals meaning there will be few who will not fit in here. Again remember CR!!

Surely statement 2 should be sufficient here.

May be I am reading too much into it but just jotting down the points that would come to my mind immediately if it were to come in actuals.­
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­chetan2u

Hi Chetan, I would like to know how common are such questions(based on interpretation of statements) in DS and where can I practice more of such questions.
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Can financial budgeting help individuals avoid debt? 26 Jun 2024, 23:36
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GMATNinja MartyMurray KarishmaB can you help with the statement 1 being sufficient?
"Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning."
This does not mean that if we perform financial planning, many individuals won't struggle! They can still struggle for other reasons, can't they?­
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Can financial budgeting help individuals avoid debt? 28 Jun 2024, 00:28
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Freddy12
GMATNinja MartyMurray KarishmaB can you help with the statement 1 being sufficient?
"Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning."
This does not mean that if we perform financial planning, many individuals won't struggle! They can still struggle for other reasons, can't they?­
Show more
­Sure, but look at the question again:

Can financial budgeting help individuals avoid debt?

Considering that many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning, I would say that financial budgeting could help individuals avoid debt.
For many people, lack of financial planning is the cause of mounting debt so it stands to reason that financial planning could help avoid debt. Note that the question uses "can it help?" not whether it is sufficient to avoid debt. 
Recall your CR basics. We say that the correct option in strengthen questions is something that improves the probability of making the conclusion true. We don't have to establish it. Something that helps it is good enough. When we say "can it help?" we are asking for the same thing. 

So I would have marked (D) here.
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Can financial budgeting help individuals avoid debt? 28 Jun 2024, 01:50
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GMATNinja MartyMurray KarishmaB can you help with the statement 1 being sufficient?
"Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning."
This does not mean that if we perform financial planning, many individuals won't struggle! They can still struggle for other reasons, can't they?­
­Sure, but look at the question again:

Can financial budgeting help individuals avoid debt?

Considering that many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning, I would say that financial budgeting could help individuals avoid debt.
For many people, lack of financial planning is the cause of mounting debt so it stands to reason that financial planning could help avoid debt. Note that the question uses "can it help?" not whether it is sufficient to avoid debt. 
Recall your CR basics. We say that the correct option in strengthen questions is something that improves the probability of making the conclusion true. We don't have to establish it. Something that helps it is good enough. When we say "can it help?" we are asking for the same thing. 

So I would have marked (D) here.
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­KarishmaB Thanks for the reply!

In statement 1 - they say "many individuals struggle with mounting debt">>So if say they were given financial planning, they might avoid mounting debt but still can have some sort of debt right?
The Q asks about just "debt" and not "mounting" debt

 
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Can financial budgeting help individuals avoid debt? 28 Jun 2024, 02:15
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GMATNinja MartyMurray KarishmaB can you help with the statement 1 being sufficient?
"Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning."
This does not mean that if we perform financial planning, many individuals won't struggle! They can still struggle for other reasons, can't they?­
­Sure, but look at the question again:

Can financial budgeting help individuals avoid debt?

Considering that many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning, I would say that financial budgeting could help individuals avoid debt.
For many people, lack of financial planning is the cause of mounting debt so it stands to reason that financial planning could help avoid debt. Note that the question uses "can it help?" not whether it is sufficient to avoid debt. 
Recall your CR basics. We say that the correct option in strengthen questions is something that improves the probability of making the conclusion true. We don't have to establish it. Something that helps it is good enough. When we say "can it help?" we are asking for the same thing. 

So I would have marked (D) here.
­KarishmaB Thanks for the reply!

In statement 1 - they say "many individuals struggle with mounting debt">>So if say they were given financial planning, they might avoid mounting debt but still can have some sort of debt right?
The Q asks about just "debt" and not "mounting" debt


 
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­mounting debt is nothing but increasing debt. They say that individuals struggle with debt that keeps increasing. Conceptually, they are talking about debt only. We cannot expect them to use the exact same phrases. 
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In my first attempt, I incorrectly guessed this to be E, because none of these options GUARANTEE the debt would be avoided. However, note that the question doesn't ask for GUARANTEE; it asks if it CAN HELP. As long as there is a possibility that financial budgeting CAN HELP avoid debt, it should be sufficient. Thus, both options independently are sufficient. Therefore, (D).
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Can financial budgeting help individuals avoid debt? 10 Jul 2024, 03:18
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KarishmaB

Freddy12
GMATNinja MartyMurray KarishmaB can you help with the statement 1 being sufficient?
"Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning."
This does not mean that if we perform financial planning, many individuals won't struggle! They can still struggle for other reasons, can't they?­
­Sure, but look at the question again:

Can financial budgeting help individuals avoid debt?

Considering that many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning, I would say that financial budgeting could help individuals avoid debt.
For many people, lack of financial planning is the cause of mounting debt so it stands to reason that financial planning could help avoid debt. Note that the question uses "can it help?" not whether it is sufficient to avoid debt. 
Recall your CR basics. We say that the correct option in strengthen questions is something that improves the probability of making the conclusion true. We don't have to establish it. Something that helps it is good enough. When we say "can it help?" we are asking for the same thing. 

So I would have marked (D) here.
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­Thanks KarishmaB for the explanation - I was treating it as conditional reasoning, but for that "Can" we have to treat it as Strengthen.
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Can financial budgeting help individuals avoid debt? 18 Apr 2025, 22:43
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Hi experts KarishmaB MartyMurray GMATNinja

I have a confusion and wanted to clear it.
I missed statement (1) as the sufficient one only due to the reason that I thought financial planning can be different from financial budgeting, is it safe to assume that they both are same? Or (1) is sufficient due to a reason that financial budgeting can be a subset of financial planning?

I also took help from ChatGTP and found the differences below:

Financial planning is a long-term strategy for achieving goals like retirement or investments, while financial budgeting is about managing daily income and expenses to stay on track.
They work together — budgeting supports the goals set in your financial plan.


GMATinsight
Can financial budgeting help individuals avoid debt?

(1) Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning.

(2) To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability.


ID: 700331

Show Spoiler
Source: Official Guide 2024-25 (Data Insight Review)
­
Show more
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Can financial budgeting help individuals avoid debt? 20 Apr 2025, 23:02
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Hi experts KarishmaB MartyMurray GMATNinja

I have a confusion and wanted to clear it.
I missed statement (1) as the sufficient one only due to the reason that I thought financial planning can be different from financial budgeting, is it safe to assume that they both are same? Or (1) is sufficient due to a reason that financial budgeting can be a subset of financial planning?

I also took help from ChatGTP and found the differences below:

Financial planning is a long-term strategy for achieving goals like retirement or investments, while financial budgeting is about managing daily income and expenses to stay on track.
They work together — budgeting supports the goals set in your financial plan.


GMATinsight
Can financial budgeting help individuals avoid debt?

(1) Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning.

(2) To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability.


ID: 700331

Show Spoiler
Source: Official Guide 2024-25 (Data Insight Review)
­
Show more

Both are not same but financial budgeting is a subset activity of financial planning - Planning involves goal setting, budgeting, investing etc.
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Can financial budgeting help individuals avoid debt? 20 Apr 2025, 23:36
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Thanks KarishmaB for clearing this doubt, very helpful.

KarishmaB
agrasan
Hi experts KarishmaB MartyMurray GMATNinja

I have a confusion and wanted to clear it.
I missed statement (1) as the sufficient one only due to the reason that I thought financial planning can be different from financial budgeting, is it safe to assume that they both are same? Or (1) is sufficient due to a reason that financial budgeting can be a subset of financial planning?

I also took help from ChatGTP and found the differences below:

Financial planning is a long-term strategy for achieving goals like retirement or investments, while financial budgeting is about managing daily income and expenses to stay on track.
They work together — budgeting supports the goals set in your financial plan.


GMATinsight
Can financial budgeting help individuals avoid debt?

(1) Many individuals struggle with mounting debt due to excessive spending resulting from a lack of financial planning.

(2) To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability.


ID: 700331

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Source: Official Guide 2024-25 (Data Insight Review)
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Both are not same but financial budgeting is a subset activity of financial planning - Planning involves goal setting, budgeting, investing etc.
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bishal128
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Can financial budgeting help individuals avoid debt? 22 Sep 2025, 08:47
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In the question asking whether financial budgeting can help individuals avoid debt, Statement 2 reads:
"To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability."
At first glance, it seems to suggest a causal link: budgeting → saving → avoid debt. However, I see several potential flaws in treating this statement as sufficient on its own:
  1. Saving does not necessarily require budgeting. Some individuals might save money without following a formal budget, so the link between budgeting and saving isn’t guaranteed.
  2. Emergencies aren’t the only reason people take loans. Even if someone budgets and saves, they might still incur debt for medical expenses, education, investments, or lifestyle needs. What if amount required in emergencies exceeds that of saving and result into debt. Further to this note, does only emergencies result into debt?
  3. Avoiding loans ≠ financial stability. Some individuals may take loans strategically and remain financially stable, so avoiding loans doesn’t automatically equate to avoiding debt problems. At times, loans would help save money (in the form of tax credit) which inturn would help reduce the debt rather than increase it.
    Given the normative nature of statement, I believe there are too many assumptions that need to be assumed before it works, thus, statement (2) alone is SUFFICIENT seems a little doubtful.
I’d love to hear others’ perspectives on this logical nuance.

GMATinsight
@nisen20 It doesn't matter what anyone thinks... The source of the question wouldn't change by someone's thinking something. The source of this question is OG Data Insight review 2024-25. :)­

Screenshot attached for reference though... so that you can be careful while making unhealthy remarks about someone on a serious public platform meant to help serious learners such as you :)­
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Can financial budgeting help individuals avoid debt? 22 Sep 2025, 08:47
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In the question asking whether financial budgeting can help individuals avoid debt, Statement 2 reads:
"To avoid taking out loans, individuals should practice responsible budgeting, enabling them to save for emergencies and achieve financial stability."
At first glance, it seems to suggest a causal link: budgeting → saving → avoid debt. However, I see several potential flaws in treating this statement as sufficient on its own:
  1. Saving does not necessarily require budgeting. Some individuals might save money without following a formal budget, so the link between budgeting and saving isn’t guaranteed.
  2. Emergencies aren’t the only reason people take loans. Even if someone budgets and saves, they might still incur debt for medical expenses, education, investments, or lifestyle needs. What if amount required in emergencies exceeds that of saving and result into debt. Further to this note, does only emergencies result into debt?
  3. Avoiding loans ≠ financial stability. Some individuals may take loans strategically and remain financially stable, so avoiding loans doesn’t automatically equate to avoiding debt problems. At times, loans would help save money (in the form of tax credit) which inturn would help reduce the debt rather than increase it.
    Given the normative nature of statement, I believe there are too many assumptions that need to be assumed before it works, thus, statement (2) alone is SUFFICIENT seems a little doubtful.
I’d love to hear others’ perspectives on this logical nuance.

GMATinsight
@nisen20 It doesn't matter what anyone thinks... The source of the question wouldn't change by someone's thinking something. The source of this question is OG Data Insight review 2024-25. :)­

Screenshot attached for reference though... so that you can be careful while making unhealthy remarks about someone on a serious public platform meant to help serious learners such as you :)­
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