5 Budgeting Myths

5 Budgeting Myths

Like Bigfoot stomping around the Pacific Northwest or the Loch Ness Monster swimming around Scotland, there are plenty of myths out there about how hard making and sticking to a budget can be. Sure, a budget might be hard if it’s new for you, but a lot of these myths are just plain bogus. So, to ease the fear around budgeting, let’s take a look at what these myths are and why they’re just not true.

First things first - What is budgeting?

Budgeting is the process of planning and tracking both your income and expenses in order to set and reach financial goals. Setting a budget can help you make better decisions with your money, prioritize what spending is more important, and save for the future.

Bring on the Budgeting Myths

Myth #1: You Have to Be Good at Math

To be successful in budgeting, you don't need to be a mathematics wiz or have a deep knowledge of financial matters. Just a basic understanding of your income and expenses is enough. First, track your income for the month and the year. Then track your spending for the month and the year. Now, create a plan to follow to make sure your expenses are lower than your income. And voila, you just made a budget. Setting a budget can sometimes be the easy part. You’ll also need to stay on track, make changes to the plans when needed, and review your budget often to make sure you’re meeting your goals.

Myth #2: Budgeting Means Deprivation

Setting a budget doesn’t mean you have to go without the things you want or need. It just means you’re more actively managing your money. That means setting aside a certain amount each month for savings, allocating what’s needed towards paying bills, buying groceries, and other necessary purchases, then building in wiggle room for fun expenses, like going to the movies or grabbing takeout. Budgeting also allows you to plan for unexpected expenses and prioritize your spending so that you can enjoy the things you love while still saving for the future.

Myth #3: You Have to Track Every Cent

Nope, not true. You don't have to track every single detail to stay on budget. In fact, you don't even have to track every purchase you make. You can focus on the big picture items, like rent, utilities, transportation, groceries, and entertainment. By tracking the bigger items and making sure they never exceed your income, you can easily stay on budget and get a better understanding of where your money is going. Additionally, you can use budgeting apps to help you track your spending and stay on top of your budget. If you think you might need some ideas on how to track your spending in more helpful ways, check out our 5 Ways to Budget Like a Pro.

Myth #4: Making a Budget is Difficult and Time Consuming

Creating a budget may seem like a daunting task, but it doesn't have to be. A budget doesn't have to be overly complex or time-consuming to help you take control of your finances and reach your financial goals, but it still requires discipline and effort. It may take some time to get started or get used to your budget, but once it’s in place, you can review it regularly, adjust as needed, and rest a little easier knowing you’re sticking to your goals. If you need ideas on how to make a budget that works for you, check out The 50/30/20 Rule: A Better Way to Budget.

Myth #5: Budgets aren't Fun to Make or Live By

Okay, true, making a budget can feel like a chore. Sticking to it and not overspending can also be tough at times. But having a budget and sticking to it can ultimately give you greater financial freedom by helping you manage your money better. It can help you to set goals for yourself and your family, to make sure that you’re saving for the future, and to reach those goals on a better schedule than just winging it. Rather than thinking of it as constricting what you spend, think about living on a budget as helping to ensure that you’re making the most of your hard-earned money.

So, be honest, did you believe some of these budgeting myths before reading through this article? Hopefully, you now know that the basics of setting a budget are simple and straightforward, and keeping a budget doesn’t have to be hard or overly restrictive. But like with any skill, budgeting stills takes practice and patience to master. But trust your go-to – you got this!