Budgeting MYTHS you should avoid!

budget myths

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Let’s be honest – there is A LOT of advice out there when it comes to creating and sticking to a budget. Perhaps you’ve followed some, tried budgeting, and it just didn’t work out. Budgeting is hard!

Budgeting is essential if you want to pay down debt, save money, and have an idea of where all your income is going each month. It’s a tool you need to achieve your money goals, and while getting in the budgeting habit can be hard, it can be a lot harder if you fall for these budgeting myths.

  1. It’s too time intensive. Yes, you have to set aside time each month to look at your finances and budget each month, however, the first few months take a few hours, and then once you get in the swing of things, it’s just a matter of updating your numbers monthly. If you want to make financial freedom a priority, then being available to work on your budget is necessary.
  2. Budgeting is hard and I can’t do math. We aren’t talking calculus here, just some basic addition and subtraction. That’s it! If you use an excel sheet, it’s even easier and the formulas will do the math for you!
  3. It’s boring. You could say that it’s a little boring or maybe overwhelming at first, BUT once you start to see that your budget is working and you are tracking where every dollar goes, it can get very exciting, especially when you start paying down debt and see your savings grow.
  4. I can track it in my head, or I know exactly what I spend. Something that’s done loosely in your head can’t be tracked over time or shared with other members of the household. If you are only tracking expenses then you are only looking at what you’ve spent. You aren’t looking forward and planning ahead on what you’ll do with unspent money. The main goal of a budget is to be able to look at the data and plan for the future.
  5. It’s too restrictive and there are ALWAYS unexpected expenses. so why bother? A budget doesn’t have to be restrictive – the purpose is to help you achieve the financial goals you set and see where your money is going. Enjoy your Sunday brunch or weekly date nights, great, keep it if you can, just put it in the budget. A budget doesn’t mean you get rid of everything that’s not a necessity – it just means you have to be able to budget for it and be able to afford it. As for the unexpected, of course, you can’t plan for everything, but you can plan for a lot – car registration, new tires, Christmas, and birthday presents, and even baby or wedding presents. For the truly unexpected, like a medical expense or auto repair, consider adding a miscellaneous category to your budget so you have a place to draw money from that isn’t your savings. Speaking of savings – always pay yourself first and create that buffer!
  6. I make more than enough money to cover my bills, I don’t need a budget. Budgets aren’t just for people who struggle with making ends meet or paying their bills on time. Everyone needs a budget so they can see where their money is going. Remember – it’s all about forward thinking!

Take control of your money and take the first step by creating a budget. Need help getting started, check out our blog: How to Create a Personal Budget You Can Live With.

Laura Berendsohn

Laura Berendsohn
Washington Branch Manager, Assistant Vice President