Table of Contents
Myths Of Budgeting
The first thing most people think about budget planning is that it takes a lot of time and is hard to do. At first, planning and making a budget may take a lot of time and be hard to understand, but in the long run, it will be very helpful. The hard work you put in during the first few days will not be wasted because you can see the effects.
Another common misconception is that making a personal budget is only helpful for people who are in bad financial shape. Personal budgeting is a great tool for anyone who wants to plan and keep track of their money. It can help people who are having trouble with money, but it is also a great tool for everyone else.
When you make a budget, you don't have to stop spending.
Instead of seeing planning as a bad thing, think about how making a spending plan will give you the freedom to spend your extra money however you want. Making a budget doesn't mean that you have to give up all the fun things in your life. When it comes to spending money on things that aren't necessary, a family that lives on a strict month-to-month income would have the hardest time making a case for it. However, the planning process could reveal opportunities for unplanned fun. Don't believe me? Try it, and you'll find out! But don't take it too lightly, or you'll finally give up.
You don't need to know how to use Excel or be good at maths.
Putting together a budget is easiest when it comes to the numbers. If you can add, reduce, and divide, you can do math. It's harder to take a real look at how much you spend and figure out where you can cut back to save more. If the numbers keep you from making a budget, you could use a free spreadsheet programme to make things easy. With an app, you can see your spending as a graph, which is usually a good thing.
Get Your Personalized Monthly Budget Tracker for Google Sheets
If it's a budget, it needs to be tight.
It's better to have a budget that can be changed. The basis of any budget should be a list of amounts for certain types of spending or regular bills over a certain amount of time. It's possible that you won't be able to stick to your budget 100% of the time because life isn't always fair. A flexible budget lets expense heads get their money from other monthly expense heads in the same month. For example, if you have to buy more clothes one month because you have to go somewhere unexpectedly, you can move some of the money you had set away for restaurants to clothes.
You can also put your planning overage in an expense head at the end of the month so that it will be available in that expense head the next month. If this happens often, you might want to change your budget to better reflect how much you need to spend. In fact, it's a rule that you should check your budget at the end of every month to make sure you've stuck to it. Don't think you can get away with giving extra. You need to learn to be responsible and make sure you're taking care of your spending. At the end of the day, your budget is what helps you spend less and keeps you from spending all your money. So it's best if it's a bit strict and makes you do what needs to be done.
It's a myth that budgeting is only for wealthy people.
If you don't make much money or are spending more than you can afford, you need to make a budget. It doesn't mean that people who earn more than they spend don't need a budget. Even people with a lot of money can benefit from making a budget because it forces them to be honest about how they spend their money. Almost always, there are ways to save, make, or spend more money. The process also helps families who have saved and invested enough to have extra money and decide how they want to spend it. You will also encourage your children to do it as well. So start getting them excited and give them a chance to save their money the right way.
People don't need budgets
This is one of the most common lies that people believe. They think budgets are more for businesses than for people. But companies don't need it as much as people do. Imagine trying to spend your money each month without a budget to guide you. Wouldn't that be a hard way to go? A budget is meant to help you make more money and will go a long way towards helping you build a big, wealthy business for yourself. In the end, isn't that what most people want? To get rich and have enough money for retirement?
Budgets aren't for people who have jobs that are safe.
Another myth that needs to be busted! People who have good jobs and make thousands of dollars a month often think that budgets are not for them and that they would be better off without them. But in fact, a budget is supposed to help people save money, no matter how much money they make. With a budget, you can keep track of what you spend and see where you can save money. So don't think that you don't need a budget because you make more money. Everyone needs a budget, and you are no exception.
Making a budget is boring
This false idea is very common. Most people think that making a budget is a dull thing to do. But budgeting is actually a very important and interesting subject. It lets you make tables and fill in information so that you can get a spending amount for yourself. Something that useful can't really be boring. At first, it might seem like a Herculean job to make one, but over time, you'll see that it's actually quite easy and can be done in a short amount of time. If you don't take it too seriously, you'll find that making a budget is actually a lot of fun.
Budgeting takes a lot of time.
The next myth is that it takes a long time to make a budget. But it's just a story! If you already have a table, it will be easy to put in the information. How could that take a lot of time? Also, it will be even easier for you if you have all your papers and paperwork ready. You just have to read the information and put it into the tables, and your budget will be done in no time. So don't think of it as something that takes a lot of time and do what you can to cut down on the time it takes to make a budget.
Mental budget is best
Many people think that making a budget in your head is the best way to do it. But making a budget in your head will only make you confused and give you false hope. You won't have an easy way to look at your budget, so you'll end up making mistakes. Also, you'll be so busy with other things that you won't be able to remember your mental budget in a week! But it's good if you're already making goals in your head, because it will be easy to write them down. Just take a few minutes to write down your thought budget, and you'll have a lot less work to do.
Budgeting is keeping track of what I spend.
Many people don't make a regular budget because they believe this myth. Don't forget that what you spend is only half of your income. A budget includes what you earn, what you spend, what you save, and what you pay off. So you won't save any money just by keeping track of what you spend. If you only keep track of what you spend, you will feel like spending more. Don't think you're planning just because you write down what you spend. If you want to have a lot of money left over at the end of the month, you need to sit down and make a real budget for yourself.
My income varies, so I can't plan one.
There is no rule like that! It doesn't matter if you earn a certain amount this month and a different amount next month. Your budget will show how much you earn and how much you spend, so the different amounts are no reason not to make one. In fact, people whose incomes change more than those whose salaries stay the same have to make a budget. It will be easier for you to figure out how much money you got in a given month and how to spend it. You'll be happy with how things turn out, and you'll be in a good place to spend your money wisely.
To make a budget, you need to have bills.
Having bills is a good reason to make a budget, but even if you don't, you should still make a budget for yourself. It's better to start when you don't have any bills, so you can be ready when you do. Even if you don't, you'll have a good chance to save a lot of money and have more than enough for retirement. You'll also pay off your debts quickly and be able to start living the life of your dreams.
Everyone can use the same amount.
This is another well-known lie that needs to be busted. It says that all sizes are the same. But how can everyone have the same budget? It's clear that it will be different for each person. It will depend on a lot of different things, like your monthly income, how much you spend, how much you save, how you pay off your debt, etc. So it's never a good idea to take someone else's budget format and use it yourself. Learn how to make your own budget template, and then use it to make your own budget. You will learn how to make a budget as you read this book. You can change the general structure to fit your needs.
Budgets mean that money is safe.
Lastly, here's a myth that makes a lot of people not save money for themselves. It says that making a budget is the same as being financially secure. But you already know that making a budget doesn't mean you'll be financially stable. In fact, it does not even mean that you will save money for sure. It's just a tool that reminds you to save money every month
It shows you how to increase your income and decrease your spending so that you have a lot of money left over at the end of the month. So don't kid yourself and think that a budget will give you financial protection. You don't have to do budgeting every month. Add your own way and try them out to see which one works best for you. Think about the fact that it is a plan to allow spending, not to stop it.
