Six budgeting myths you need to ditch

Budgeting myth #1: Budgeting requires you to be a math genius

Don’t let your fear of arithmetic steer you away from creating a budget. The math involved in budgeting is limited. At a minimum, all you need is an itemized list of expenses, your total income, and any goals you wish to achieve. You can plug in your budgeting details into a template in Microsoft Excel and it can take care of the heavy mathematical lifting. If you’re attempting to establish your budgeting goals, learn more tips and tricks to set yourself up for success.

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Budgeting myth #2: Budgeting requires you to make a certain amount of income

For low-income families and individuals, the idea of budgeting can feel infeasible. However, it’s critical to develop a budget when your money is tight. For strict budgets, strip your budget down to your bare necessities. Account for your essential expenses—food, mortgage payments or rent, utilities, car payments, loans, etc.—and aggressively track your spending habits. Even if the amount of money is minimal, consider establishing an emergency fund for any unforeseen financial obligations. If you don’t have a budget, it can be difficult to eventually reach a point of financial stability. Try budgeting to the best of your ability.

Budgeting myth #3: Unexpected expenses make budgeting pointless

Unexpected expenses show up in everyone’s life and should be accounted for in a healthy budget. If you don’t have an emergency fund or additional funds for variable expenses, you should re-evaluate your budget. Generally, emergency funds should have enough money to cover up three to six months’ worth of expenses. If you are living paycheck to paycheck, building a significant safety net can seem impossible. However, even setting aside some money can provide security. If you’re struggling to save money, it can be difficult without a plan. Learn how to save for an emergency fund to sustain your financial health.

Budgeting myth #4: Budgeting must be very restrictive

When someone hears about budgeting, they may immediately jump to its financial restrictions like cutting back spending and saving more money. However, budgeting doesn’t have to be incredibly restrictive. When you create a budget that’s too strict, you can’t adhere to it. It’s normal to spend money on take-out, shopping, or things that you want. Everyone’s financial situation is different, and some people may need to be more restrictive than others. However, don’t deprive yourself of the joy in life with a highly restrictive budget. Strike an appropriate balance between preparing for your financial future and enjoying the moment. If you are struggling with overspending, the 50/15/5 saving and budgeting rule may help.

Budgeting myth #5: Budgeting is unnecessary without any saving goals

An incentive to budgeting is that it helps you build toward larger financial goals. Whether you are saving for a down payment on a home or a trip to the Mediterranean, a healthy budget can help you get there. For people comfortable in their living situation, they may not see a reason to budget. Even if you don’t have a long-term goal, budgeting is essential to ensuring your financial health. If the unexpected happens, it may negatively impact your financial health. Desires also change all the time. In the future, you will be happy your nest egg is available to help fulfill whatever dreams your heart desires.

Budgeting myth #6: Budgeting is too time consuming

Initially, budgeting requires you to set aside time. You need to outline your expenses and income and establish a game plan to achieve your goals. However, once you establish it, you don’t need to do it again. Budgeting is a singular, or occasional, time investment that is worth it, to secure your financial future.

Eliminate budgeting myths from your life so you can take control of your financial future without any confusion or doubt. Learn more tips and tricks to develop realistic and healthy budgets.