Believing These 5 Budget Myths is Preventing Your Money from Reaching Its Full Potential

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Have you fallen on and off the budget wagon over the years? Feeling like budgeting is a giant pain every time you sit down to calculate your bills and what you can spend? It doesn’t have to be that way.

There are a ton of myths that cloak budgeting, but ultimately, it’s a way to provide security and guidelines for your money, especially for surprises or when things go a bit haywire. And budgeting can be a useful tool whether you’re tight on cash or preparing for unexpected circumstances like this year’s global pandemic. Let’s bust some myths so you can get on the right track with your money habits.

1) I Make Plenty of Money at My Safe Job

Even though you’re making enough every month, is your money living up to its full potential? Are you maximizing your savings, investments, tax refund, paying down your debts, or planning for unforeseen issues like losing your job?

As much as it may seem like your salary is safe, surprises happen, from layoffs and downsizing to acquisitions and going out of business. Always being prepared with at least three to six months of living expenses and a framework for saving makes difficult situations easier to handle. Especially for those who want security and peace of mind, figuring out how much to save makes your money work efficiently, cuts your splurge urge, and gives you money guidelines to follow.  

2) Budgeting Means Giving Up the Fun Stuff

If the word “budget” sends chills down your spine, it’s helpful to remember that it doesn’t always mean loss or cutting back. In fact, much of budgeting is tracking your plan instead of giving up the things you love. Creating categories for treats like eating out, travel, or shopping helps you save to spend. Then the fun is guilt-free because you’ve already dedicated money towards these purchases.

It’s about big-picture planning instead of quibbling over every cent, and it helps see what you spend money on frequently. It’s smart money management, and when you focus on what you value using your money for as part of your budget, it’s easy to allocate, save, then spend.

3) I’m Too Broke to Budget

It may feel like you need tons of money to move around to begin budgeting, but the truth is when you make less money, knowing where every dollar goes matters to your financial future. Budgeting is the way to step into having money in the future, building long-term wealth, paying off debt, cutting expenses, and growing your savings. If you want to have more funds later on, creating a financial knowledge base now sets up the system to track and expand your future earnings.

4) Budgeting Includes Complex Spreadsheets and Calculations

It doesn’t have to! Whether you hate complicated processes, or lack discipline or math skills, budgeting doesn’t have to be a rigid system. There are plenty of apps, programs, and tools to automate your budgeting and transfer funds between your financial accounts so you don’t have to punch any numbers into a calculator or spreadsheet. Digital money tracking offers the opportunity to maintain your financial health, stay flexible to your needs, and form a less hands-on system that shows you what you need to know with a quick glance.

5) I Already Plan for Surprises and Track All My Spending

That’s awesome, but it doesn’t mean that you shouldn’t have a plan that ensures you’re staying aligned with your financial goals. You may not need a detailed system, but knowing where your money is going at all times helps you see changes fast and deal with unexpected expenses. To make money moves, you need to see what you did with your money beyond spending, that includes monthly fixed costs and bonus expenses, monitor lifestyle shifts, and look for ways you can create a more financially-sound future.

When you think of budgeting as a tool, general guidelines, or bumpers for your income, it starts to look a lot less strict. You feel freer to spend your extra money how you want, when you want while building a financial fun (and secure) future.

Looking for ways to budget? Here are 3 types to choose from:

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