There is a strong need for budgeting myths to bust because these prevent individuals from making viable decisions about their hard-earned money. Misconceptions are obstacles that stop you from creating realistic budgeting plans.
Once the myths are busted, it becomes easy to take the next step and create a plan to help reach goals and achieve financial stability.
10 common budgeting myths
1. Budgeting is time-consuming
The first thought that strikes you whenever you think of making a budgeting plan is that it is time-consuming, and you only have a little time to waste.
Let go of this misconception. Instead, consider it a golden opportunity to take a fresh look at your expenses and savings. The initial framework of the budgeting plan will take time, no doubt, but adjusting it based on your priorities and plugging in the required numbers will be considerably fast and easy.
2. It is a difficult process
Another budgeting myth that needs to bust is that it is a complex process. Everything looks complicated initially, but it is comparatively smooth sailing once you set your mind to the task and find the right tools.
3. The process is boring
How can you consider budgeting boring when it is the key to keeping you solvent and debt-free? Bust this budgeting myth and be proactive in creating a financial plan that will push you to arrange your finances systematically.
4. I can do a budget in my head
There is no need to make a proper plan as I can do it easily in my head – this is one of the most common budgeting myths to bust. Only brilliant minds can do so, and even they will fumble at one time or another.
Hence, take the standard route and create a plan for concrete decision-making.
5. I keep track; hence no need for budgeting
Tracking your expenses is not budgeting because you are only looking at one aspect, “expenses,” and ignoring the all-important one, “savings.”
The budgeting plan is about the upcoming month and how you will divide your income for future necessities, wants, and savings. The budgeting process will seem much more manageable if you keep track of your spending.
6. The budgeting process is very restrictive
Budgeting will be as restrictive as you want it to be. There is no need to make the budget restrictive because you can easily include things you enjoy, like a Saturday movie or a take-out once a week, or any impromptu expense by setting aside a sum within your budgeting plan.
7. No need for a budget as there are so many unexpected expenses
When there are too many unexpected expenses, there is a serious need for a budgeting plan. Once an individual starts making a budgeting plan, he will realize that unexpected expenses are part of life and need to be handled effectively within a limited budget like other expenses. Set aside an amount monthly if these are regular features and cut down on your wants to make up for it.
8. Budgeting means no more spending on me-time
Not budgeting stops you from spending on me-time as it gives you a set amount that you can use wisely and regularly. Needs are essential, but so are wants that must be taken care of to break the monotony of daily routine.
Hence budgets often set aside a sum that individuals can use for recreational purposes or shopping or weekend treats as they want.
9. It is impossible to stick to a budget
It is a myth that you cannot live on a budget. If it were a fact, then experts would never have recommended a budgeting plan as a necessity.
If you make a restrictive budget or plan for the sake of it without putting in your full efforts, then the plan will never be adequate. Hence make reasonable plans with careful considerations to make a success of it.
10. I am quite well-off, so there’s no need for a budgeting plan
The misconception that I have enough money, so there is no need to make a budgeting plan, needs to be busted. When you have too much money, the need for careful planning and handling of your spending and savings becomes greater.
It does not matter whether you are earning in thousands or crores; a budgeting plan is necessary as it directs your actions.
Conclusion
Learning the truth will set you free, as several budgeting myths will bust automatically. A realistic look at your earnings, spending, and savings will lead to better managing your finances and creating achievable goals.
Take the help of budgeting apps or financial advisors like the experts at Edufund to create a personalized budget
