What do you think of when you hear the word “budget”? The thought of being on a budget is probably as cringe-worthy as hearing nails on a chalkboard. Believe me, I know how un-fun keeping a budget can be. I tried to keep one several times before I managed to find a system I like and stick with it. Some reasons for the negative feelings I had, and maybe you have, were based on myths and misconceptions about keeping a budget. I now know these not to be true. Let’s take a look at some of these.
1) Budgeting equals deprivation
Budgeting may feel like deprivation at the start if you’re in bad shape financially. You’ll have to tighten the belt and reign in your spending. Like dieting though, it’s difficult at the start and then gets better as you see positive results. If you’re not in financial dire straits, you’ll see that budgets are in fact flexible. You can vary what you spend your money on and even budget for fun and entertainment. Your budget will tell you where you’re spending your money, not preventing you from spending it.
2) Budgeting is boring, stressful, and time-consuming
Actually, lack of a budget is even more stressful. It’s stressful when you don’t know if you’re going to be able to make the credit card payment or rent or any other financial demand this month. It’s stressful keeping track of all the numbers in your head, adding and subtracting, or even guessing them all the time. Compare that to the stress from crunching numbers for a few minutes a week or even once a month once you have a budgeting system established.
3) Budgeting requires complex math
No heavy math is needed to keep a budget. There are software and apps that do all the calculations for you. You only have to punch in the numbers. Or you can turn to the traditional method of using a calculator with a paper and pencil. You only need to know addition and subtraction to make it work.
4) I make a ton of money so I don’t need a budget
No matter how much you make, it’s good to keep a budget. Tracking your income and expenses will give you peace of mind and allow you to make better decisions about what to do with the money do have. Even wildly successful businesses track their income and expenses so they can make smart business decisions. And I’m sure we can all name some professional athletes and celebrities who were making millions upon millions only to end up broke due to poor money management.
5) I don’t want anything big or expensive
You may not want anything now, but there’s nothing better than saving for that rainy day when you do. Do you expect to be the same person living in the same place with the exact same wants and needs for the rest of your life? Probably not. Budgeting now will set you up to do what you want to do later, whether buy a house, take a nice vacation, or even handle an unexpected job loss or medical expense.
6) My children, pension, and Social Security are my retirement funds
People are living longer and longer nowadays with the average life expectancy in the US being over 78 years old. We know that medical expenses can rise with age, as can the cost of personal home care or assisted living. Pensions and social security payments may not be enough to meet your needs. Your children may have unexpected life events of their own. By budgeting, you can set yourself up better to handle whatever comes your way now or as you age.
Now that we’ve debunked those myths, it’s clear that budgeting is the way to go for a financially healthier and saner life. But it’s okay if you’re not sold on budgeting yet. Or you may know that budgeting is good for you but can’t bring yourself to adhere to one. The fact that you’re reading this post means you’re thinking about it and that’s a start in the right direction. Stick with me as I explore more topics about budgeting and financial life in future posts.