The word ‘budget’ has become such a negative term to many people, it sounds boring and restrictive. Some people might have had bad experiences with budgeting and wrote it off all together. But maybe it is time to try budgeting again…
The word ‘budget’ has become such a negative term to many people, it sounds boring and restrictive. Some people might have had bad experiences with budgeting and wrote it off all together. But maybe it is time to try budgeting again. Making a budget is important for good financial health because it makes it easier for people to see their income and expenses and to plan for the life they want to have, no matter where they start financially. Sometimes, myths about budgeting can stop people from even trying. Here are 6 myths (and why you shouldn’t believe them) when it comes to making a budget.
Myth 1 – It Takes Too Much Time
Sitting down and setting up an initial budget might take a bit of time but once you get everything set up, you won’t have to make any extensive changes unless you experience any major life changes (job changes, marriage, kids, moving etc.) Taking the extra time now to set up a budget can literally help you save money for later.
Myth 2 – Only People Who Are Good at Math Can Set Up a Budget
Budgeting actually has very little to do with math and more to do with collecting data and putting it into a budget. The only math you really have to do is your monthly income minus your expenses. Also, budgeting apps, spreadsheets, and calculators can help with the minimal math required for a budget.
Myth 3 – I Don’t Need a Budget… I’ve Got it Under Control
It is easy to think you know what you’re spending your money on, but you will be surprised to see some of the purchases that go unnoticed especially if it is one-time expenses. When you can see all the money you spend and the money you make all together, you can begin to take control of your spending.
Myth 4 – Money is Tight
No matter how much money a person has, budgeting is important. By planning on how you are spending your money, you can start to maximize how efficient your income is and start to build more security for yourself and your family. Setting up a budget will help you plan for bills and other expenses which will mean less surprises giving you the opportunity to prioritize your spending.
Myth 5 – Budgets Don’t Work
Some people say budgets don’t work because of unplanned or sporadic expenses but that is not entirely true. A good budget actually does plan for unexpected events by setting aside emergency funds or extra padding for miscellaneous spending. The actual cost of unplanned expenses might not be exactly what was set aside for in the budget, but if you are able to plan ahead enough, you will be better off in the long run.
Myth 6 – Budgets are Too Restrictive
People will give up on budgets because they think they are too restrictive. The truth is budgets are flexible because people can customize what they spend their money on. It becomes restrictive when people think they can spend any money on anything even if they don’t have the money. Budgets are a great way to prioritize spending as well as be able to set goals now for something people will want in the future whether that is a new phone, to buy a house, or to get out of debt.
If you are ready to start budgeting, now is the time! Mary Rigg is hosting a series of FREE financial workshops aimed to help you take control of your finances. The first one is Budgeting 101 and will be on Thursday, June 23, 2022. Sign up for it here! To connect with a financial coach call 317-639-6106 or click here.