If you are not budgeting your money right now, two main reasons could be responsible for it; the first one is the fact that you may not have insight into how a budget is being created, while the second reason could be that you have certain budgeting myths that are deterring you from budgeting your money.
Building a working budget is one of the best decisions you can ever make when managing money effectively and growing one’s finances. It helps you to have a full grasp of how every dollar is being spent from your account.
However, you may not be willing to improve your finances with a budget the moment you start instilling some budgeting myths in your head. You must understand that some so-called facts about budgeting are not true, and they are just myths that discourage people from budgeting their hard-earned money.
This post will teach you the common budgeting myths you need to unlearn as soon as possible. Also, you will better understand the purposes of creating a budget.
What Are Budgeting Myths?
Budgeting myths are a set of false beliefs anyone has about budgeting money. These beliefs usually mislead you to think budgeting is not instrumental to your finances, hence, compelling you to make terrible decisions that could cripple you financially.
Why Do People Have Budgeting Myths?
People can adopt budgeting myths due to their past experiences with budgeting itself. For example, someone who once tried to budget money but failed while doing it may never want to try budgeting again. As a result, such a person would begin to embrace false beliefs about budgeting to justify their decision never to build a budget.
What Should You Believe Instead Of Budgeting Myths?
Instead of believing popular or made-up myths about budgeting, you should receive proper education concerning how to build a budget and the reasons you should make it a habit. When you’re properly educated on the essence of creating a budget, you will be able to pinpoint the benefits of budgeting and make them the right set of beliefs instead of getting hypnotized by the myths.
Besides, you must understand that budgeting is a simple strategy to secure your finances and prevent you from making common mistakes such as impulse buying, living paycheck to paycheck, and piling up credit card debt.
9 Budgeting Myths You Should Stop Believing ASAP
If you must build a budget efficiently and effectively, here are 9 budgeting myths to stop believing:
1. Budgeting Takes Time
Budgeting may seem like a strenuous job that consumes so much of your time, but that’s not true.
Creating a budget is a straightforward activity you can execute within a very short time. If I’m to be specific, you can budget your money for the month in less than 3 hours. Although this is relative, budgeting doesn’t steal your time or prevent you from carrying out other important tasks.
What you must do is ignore the budgeting myths in your head, commit a few hours of your time to examine your expenses, and categorize your spending. Then you can allocate a certain amount of your money to each category.
Another thing you must know is that you will definitely get better at budgeting. This means after your first few months of building a budget, it would become a habit you are used to. Thus, creating a budget would no longer appear to be a daunting task.
2. Budgeting Is Mathematics
This is one of the common budgeting myths you need to stop believing for your good. Regarding math, budgeting would never pose tough mathematical tasks for you to complete. Although you are dealing with numbers when building a budget, you only need to understand simple third-grade math. Your job is to outline your expenses, subtract the cost from your income, and figure out what’s left.
It doesn’t get any more complicated. If your fear of math has been why you dislike budgeting, you need to quit making that lame excuse. Come to think of it, would you rather hate math or watch your finances crumble due to poor budgeting methods? I’m sure your answer is NO.
Truth is, the math involved in budgeting is simple and straightforward. The earlier you realize this, the better for you.
3. Budgeting Is Boring
A ridiculously high number of people don’t build a budget every month because of this; they believe budgeting is a boring task. But do you know what else is much more boring? Bankruptcy Court, credit card statements, and collector calls.
You obviously don’t want to be in an awful situation like this, and you must run away from it as fast as possible. That’s why you should never overlook the importance of budgeting or find it boring.
Moreover, if you are married, budgeting shouldn’t bore you in any way. This is because you can join efforts with your partner in building the budget, and you both can exchange ideas and share your thoughts on how the budget can be better. Besides, when you realize there’s support from another party, you will get some relief.
On the other hand, there are now budgeting apps online that you can rely on to budget your money. They do all the heavy lifting and make it much easier to track your expenses.
4. Budgeting Can Be Done In Your Head
There’s no denying that this is one of the most popular myths about budgeting to stop believing. When you underestimate the functions of a budget, you move on to believe that budgeting can be done in your head.
If we are honest, it’s actually possible to prepare a budget in your head. However, such a budget would be crap because you won’t even be able to stay committed to it, and you won’t take it seriously.
You need to document your budget with pen and paper or use the spreadsheet on your PC. Once you are able to do this, it would be easier for you to stick to the budget, knowing full well that you put in a lot of effort to set it up. Besides, once your budget is documented, it won’t be difficult for you to track your expenses.
More importantly, if you are married, it doesn’t make sense to build a budget in your head. Both parties must be involved, which is impossible if one person decides to keep the budgeting process hidden upstairs.
5. Budgeting Means Keeping Track Of Expenses
Keeping track of your expenses is vital, but that’s not all budgeting entails. Sadly, many people adopt this as one of their budgeting myths.
If you choose only to track expenses, you would be focused on the past since you only examine the amount of money you have spent. You won’t be able to see the future of your finances or plan ahead.
Remember, your budget is your plan for how you intend to spend your money in the upcoming month. You are actually making plans for the money you are yet to spend.
Keeping receipts or using your online bank statements to see what you’ve spent money on in the previous month is an example of keeping track of your expenses. While this is very important, it’s not the only thing you should rely on, and it would help if you plan for future expenses by preparing a budget.
6. Budgeting Restricts Your Spending Power
A budget doesn’t restrict your ability to spend money; it directs it instead. It helps you to discern the right areas where your money is supposed to be sent.
Now, here is the thing; no matter how much you earn in a month, you can’t afford everything you desire. It’s practically impossible. Even if you earn $50,000 every month, it’s not enough to pay for everything you want.
Remember, human wants are insatiable. What this means is that regardless of how much you make, your spending power is limited.
Since you can’t buy everything, it’s important that you spend your money on the right set of things that are of necessity to you. This is where a budget comes in.
A good budgeting method will help you make the right decisions regarding your expenses. Rather than believing flimsy budget myths, understand that a budget doesn’t bring restriction; it brings direction.
7. Budgeting Is Irrelevant Due To Emergency Expenses
This has to be one of the top budgeting myths that discourage people from building a budget. Usually, budgeting seems like a way of predicting the amount of money you are expected to spend in the upcoming month. However, since emergency expenses are likely to surface in the course of the month, budgeting may now seem irrelevant or needless.
Emergencies are not usually predictable, yet they can be planned for. You can plan ahead for unexpected expenses by building an emergency fund. Instead of breaking your budget whenever emergencies occur, you can get a boost from your emergency fund.
On the other hand, some financial experts advise that you make room for impromptu expenses in your budget. In the Dave Ramsey budgeting strategy, that category is called ‘miscellaneous’. Things like medical bills, car troubles, birthday gifts, and other unexpected expenses fall under this category.
8. Budgeting Is Only For Broke People
One of the budgeting myths you must never fall for is believing that budgeting is meant for only people who struggle financially. While building a budget is vital for someone facing financial challenges, even some rich folks still budget their money.
When you understand the purpose of a budget, you will realize that budgeting is meant to be everyone’s habit regardless of a person’s financial status.
Fun fact; Dave Ramsey, a millionaire financial advisor, still budgets his money since the last time he went broke nearly 30 years ago.
If you want to succeed financially, you need to see budgeting as a tool, and you need to consider budgeting as one of the most important money habits that drive poverty away. Although many people may be falling for this budgeting myth, you shouldn’t be one of them.
9. Budgeting Prevents You From Eating Out
Building a budget doesn’t mean you won’t be able to visit the restaurant and eat out anymore. That’s just one of the common budgeting myths people toss around.
If you want to keep eating out, you must budget for it. Please include it in your budget and make sure it’s not eating up your finances. But the moment you notice that eating out would stop you from saving money or achieving certain financial goals, you must find an alternative; start preparing your own meals.
Of course, you may not know how to cook, but that’s not a worthy excuse. Anyone can learn how to cook right now. Social media and content-sharing platforms have made it easy for people to learn many things. YouTube, for instance, has hundreds of thousands of videos on how to prepare different types of meals.
Thankfully, you can watch these videos for free. All you need to do is go to the YouTube search bar and request a tutorial on how to cook any of your favorite meals; several videos will appear offering to teach you.
But even when you know how to cook, you can still step foot in a restaurant, as long as your budget makes room for it.
Final Thoughts On Budgeting Myths
Budgeting myths are like tiny roadblocks that impede you from seeing the benefits of building a budget. If you keep believing them, you won’t see budgeting as a good decision to make. However, since you have learned about these myths and why they are absolutely wrong, you should be able to make good decisions concerning your budget henceforth.
Moreover, if you are still in college and want to take budgeting seriously, quickly check out these budgeting tips for college students. These tips will guide you on appropriately building a budget and staying committed to it even as a college student.
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