By: Johnny Ortiz
Many people give up within days or weeks after making a few attempts at budgeting. This may be because of the bad reputation budgets have gained over time. However, that’s not the case. A budget is not only about crunching numbers and itemizing numbers. It’s a valuable instrument that can help you track your spending and direct it towards activities that will improve your life month by month. It will assist you in making your money work as hard for you as you do for yourself.
So, there is a negative budget mentality that needs to be eliminated and getting people into a positive life-changing teamwork mindset with their money. Here we’ll go through the five most common budgeting myths and set you on a journey where your money will bring you freedom and choice.
MYTH 1: BUDGETING IS TIME-CONSUMING
You might hear this misconception about budgeting many times that it is time-consuming. That’s true to some extent, because in the beginning, budgeting may take some time since you will need to collect some information on your total earnings and expenses. Additionally, you will also need to write down your long-term goals to steer the budget towards achieving your goals.
Honestly no one likes to feel like they have restrictions in life. However, in reality it should be seen as insurance. Most people would rather live life like there is no consequences. In fact the hardest part about having a budget is sticking with one. Make a budget now so that you can have an end goal.
Nowadays, there are several budgeting apps and calculators available that can help you simplify the budgeting process. Many financial experts consider budgeting as a financial roadmap whose benefits outweigh this myth.
MYTH 2: MAKING A BUDGET IS COMPLICATED
A budget can be as simple or as complicated as you want it to be. But if you just look at it on the basic level, budget is simply your income minus your expenses, and savings equals zero.
Experts recommend using an Excel sheet to make a list of the money coming in and going out. There are also some other platforms such as Mint, You Need a Budget, and Every Dollar, but you’ll want to use a platform that feels comfortable for you.
However, if those options feel daunting, it’s perfectly fine to use a piece of paper and pencil. At the top of your budget, write down your net monthly income (After-tax deduction), and underneath, write your monthly expenses. It’s simple as that, now you have your simple budget!
Now, that’s completely up to you if you want to add information like gross pay or credit card balances. You can simply add as many details as you want but the truth is, none of that is really important. All you need to do is listing your income and expenses.
MYTH 3: A BUDGET IS TOO RESTRICTIVE
A budget by itself shouldn’t be restrictive at all but people make it for themselves. This is a misconception that budget equal deprivation makes it difficult for most people to get started with it. No one wants to give up on Saturday morning coffee and bagel. To be honest, you don’t have to you can keep your weekly caffeine and schmear combo just by simply putting it in your budget.
It means, when you create a monthly budget, be sure to include things you enjoy. You can create a separate category for your weekend treat, Friday night takeout, or a trip to the movies in your budget. Having a budget doesn’t mean you can’t do things you enjoy. Believe it or not, but budget gives you the freedom to spend your money!
MYTH 4: I CAN DO BUDGET IN MY HEAD
We’ll consider you the most genius person on the planet if you can do a zero-based budget in your head every month. If you think you can do a budget in your head it’s not a budget. It’s a lazy way of shirking your fiscal duty and cheating on your future self.
A budget needs to be something you can track. It’s only when you sit down and began to work out your numbers. This allows you to see many small changes and tweaks that need to be made to change the tide on debt and savings.
A budget is about more than just a month’s money. It’s about planning ahead of time so you can figure out exactly how and when you’ll achieve your financial goals.
MYTH 5: IT’S NOT THE RIGHT TIME FOR ME
There’s no such right and optimal time you’re waiting for to get started with budgeting. You’ll have to deal with many things coming up, that’s life.
People often give up on budgeting for events like birthday or anniversary that is coming up. And they think they’ll start budgeting once everything gets normal. But that’s not going to happen!
Think about the benefits that the budget will provide you in situations like that. It will help you spend money on gifts and festivities. You’ll be able to afford the expenses of different events every month. That’s the biggest reason you’d want to start budgeting.