The Worst Budget Myths You Might Be Falling For

The Worst Budget Myths You Might Be Falling For
February 21 12:08 2017 Print This Article

Even though budgeting is an excellent way to manage your finances, many people don’t realize its importance and think that it is not for them.

Here are the worst budgeting myths:

I have a secure job

Many people believe that the best they can do is to take their paycheck and deposit the money into their checking account and use a debit card to spend it. They think that they are doing the right thing since they are not incurring any credit card or quick cash loan debt. While this is great, they are leaving no room for saving any money since all the money is spent.

The bad news is that there are no guarantees in life and the possibility of downsizing or losing your job is nothing but real. Even if you are working for a small company or a privately owned business, the owner could die or go bankrupt. That is why it is critical to debunk myths like this one as it can have some serious consequences on the quality of your life. You should always prepare yourself by having at least three months’ expenses in your savings account. Three months is enough time for you to get a new job should you lose your current one.

I don’t have time for budgeting

Once you start budgeting, you will spend a couple of hours every month to sort your budget out. After a few months, it will get a lot easier. You have already established the main frame, and you’re just inserting numbers while math is doing the rest.

We think that this is one of the worst budgeting myths ever because if you don’t have time to think about your financial security, then your priorities need to be revised.

Budgeting is math, and I hate it

As we are debunking myths about budgeting, we are happy to tell you that budgeting has nothing to do with your math abilities. Thanks to the new budgeting programs available, all you have to do is to follow the instructions as you insert your data. Many of these budgeting programs are also available as mobile apps.

Budgeting means depriving myself of stuff

This is one of the reasons why people skip budgeting altogether. Some people think that budgeting means depriving yourself of all the fun things like shopping and going out. When you have this mindset, it is more likely that you will be reluctant to do it.

The truth is that budgeting is about managing your finances and saving an amount of what you earn for a greater goal. It could be saving up for a trip or to buy an electric appliance that you have wanted for so long. It is a way to ensure that you are not spending more than what you earn.

I don’t need anything big, so I don’t need to save

What if you are perfectly happy with everything you have? You don’t need to buy a new house, car or even a blender. Good for you, but this might not be the case in 5 years.

As time changes, so do your priorities. If sometime along the road you felt like moving to another city, where the house prices have dropped, or you finally decided to start your own business, you will be happy to have some years’ worth of savings in your bank account.

I’m debt free

We feel obliged to debunk myths like this one. Being debt free is great news but what are your plans in case of an emergency? You are spending exactly what you earn. Your zero balance can turn into a negative one quickly if you have some emergency bills and have to start looking for quick loans on the same day to pay them.

I can do my budget in my head

Congratulations. You are the brightest person on the planet. You are even smarter than many people working for the IRS.

There is no such thing as doing your budget in your head. Budgets need to be done on paper, a spreadsheet or a program that you can easily track on a monthly basis. When you are doing the math in your head, this is not budgeting. It is more like having a vague idea of what you earn versus what you spend. This is something that you can’t recall to compare changes and differences.

I don’t need budgeting because I keep track of everything I spend

Debunking myths like this one is not difficult. It is great that you are keeping track of all your past spending, but you are not looking forward. Budgeting is about managing the money you haven’t spent yet. If you are already keeping track of your past spending, then budgeting is just the next natural step, and it will be easy for you.

It is quite surprising that many people fall for these myths. But the good news is that you don’t have to be one of them.

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