7 budgeting myths
Common misconceptions around budgeting
Let’s face it. Budgeting gets a bad rap. There are a lot of common myths I hear about why someone doesn’t want to start a budget or why they don’t think they even need one to begin with.
Here are some of the most common ones…complete with myth busters!
1. I don’t have time to budget
If something is a priority, you will make time for it. Plus, once you get your budget set up, it really only takes about 30 minutes a week to keep on track. Can I sit around and stare at my budget for an hour at a time, wanting more to happen? You betcha. In the YNAB-nerd world, we call it being YNAB bored. That’s when your budget is running nicely on autopilot and you are just there to make sure everything stays in order. A client recently told me that she was starting to get bored with her budget. And my response was – wouldn’t you rather have your budget be boring?? Leave the excitement to the trip you are planning or seeing your retirement balances increase! Your budget isn’t exactly the area where you want there to be a lot of things that stress you out!
2. I hate math/you have to be good with numbers
I still hate math too. And I don’t trust myself to calculate numbers in my head. But I love budgeting. It’s ok to use the tools available to you. And budgeting really only requires basic addition and subtraction! No complex formulas here! Don’t let the numbers scare you away from getting started.
3. Making a budget is complicated
Sure, you can make a super complex budget. But you don’t need to. The main concept behind budgeting is to make sure what you are spending isn’t more than you are bringing in. If you find you only need 10 categories to be able to see that, then great! If you are a little more OCD like I am and want 50+ categories, then that’s ok too, if that’s what works for you and you don’t get bogged down by the complexity. You can always start small and add as you go.
4. I don’t know where to start
Starting is always the hardest part of anything new. So, don’t fuss over where to start, just start! If that means you start by writing down what you spent today, then great! Or maybe you want to start with what’s coming in. How much money is actually deposited into your bank account each pay? That’s what you have to spend so it’s a great starting point. Or another place might be with the fixed expenses you pay each month. Start listing out your mortgage payment, cell phone bill, electric and internet bills. Add from there throughout the month as you see those expenses come across your bank account.
5. I keep track of everything in my head
Mental accounting might be ok in the occasional circumstance, but more often than not, I’ve found that there’s a larger area for error when you try to keep everything in your head. There’s bound to be something you forget about or an expense that hasn’t cleared yet that your missed in your calculation. Having a place to keep all of that written down helps avoid that.
6. I track my expenses, so I don’t need a budget
There is a difference between simply tracking expenses and actually budgeting.
Think of tracking expenses as something that looks backwards to see what has already happened. You are making a list of where money was spent and then adding up the different categories. This is the passive way of looking at your money and seeing what’s in the past and can no longer be changed.
Budgeting is where you are proactively telling your money where to go and adjusting along the way. Think of budgeting as forward thinking. Where will money need spent in the future? Or how can I adjust spending in one area to be able to buy this today? This way you are able to make changes before things happen, rather than just looking at the list of transactions at the end of the month.
7. I don’t have enough money to budget
Perhaps you don’t feel like you have a lot of money today, but that is even more of a reason to start budgeting now! It’s a great time to build good habits that can be expanded on as you make more money and eventually have more expenses as well!
So, what are you waiting for? Try out my favorite budgeting software free for 34 days, check out this free expense tracker or schedule a consultation if you are ready to dive into this together!
Let’s do this!
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