While budgeting is very common, there are thousands –– if not millions –– of people who don’t quite understand how budgeting works. Indeed, if you’ve never taken the time to form a budget yourself, you may be susceptible to believing some untruths about budgeting. Thankfully, today we plan on setting the record straight about saving money. Here are four detrimental budgeting myths that can cost you money and cause you to fall short of your financial goals:
Budgeting Doesn’t Require Planning
How hard could it be to keep track of all of your purchases in a single day? What about a week? Or a month? Or three months? The reality is that it’s extremely tough to monitor your spending in real time for longer than a couple of days. So trying to “budget on the fly” is a bad idea that won’t lead to positive outcomes. Instead, you could actually end up spending even more money without realizing it. While it’s true that you don’t have to plan out every purchase you make for the next three months, you should have some semblance of a written plan in place to help you stay focused.
You Can’t Spend Any Money While Budgeting
Budgeting is a lot like dieting. A good diet allows a person to swap unhealthy meals for lighter, healthier alternatives. In the same way, budgeting aims to cut out inessential or regrettable purchases. Yet, this doesn’t mean you can’t spend any money on a budget. Just the opposite is true! After all, it wouldn’t make any sense to pull the plug on an investment of an innovative product like cell culture flasks, nor is it a good idea to stop paying into a retirement fund. Rather than spending money on impulse buys though, budgeters can apportion their funds toward better causes.
Budgeting Can Wait
Perhaps you think you have a high enough salary that you don’t need to budget. Or, maybe you don’t think you have enough capital to even go on a budget. In truth, though, everyone should have a budget of some sort because budgeting allows people to build up emergency funds –– something that people of all income groups require.
Budgeting isn’t Fun
The best budgets are about delayed gratification. No, it’s not fun to give up small purchases in order to meet a monthly budget. Yet, after saving up for a few weeks, months, or even years, savvy budgeters will have the cash they need to pursue their dreams. Whether you’re budgeting to pay for college, a vacation, or even a dream home, the rewards of sticking to a smart financial plan are massive and tangible. You just have to exercise a little patience and discipline to reap them!