What are the Budgeting Myths That Could Be Holding Me Back as a Beginner?
Whether you are new to budgeting or have failed at having a strict budget before, you may not realize how important budgeting is – especially since inflation has affected the cost of living across the country. Budgeting can help you create financial goals, save money, and track your expenses. It can also help you make smarter financial decisions that align with your long-term goals! An effective budget will give you more disposable income; therefore, you can have more money to save for the future.
With the effectiveness of a budget in mind, consider these budgeting myths that could hold you back as a beginner.
Budgets are too Restrictive and Ineffective
Truthfully, some budgets can be restrictive, which often leads them to be ineffective. If you aren’t allowed certain privileges within the confines of your budget, such as paying for your favorite subscriptions, you may be tempted to overspend on things you don’t need. Instead of completely cutting yourself off from unnecessary purchases, try to include them in your budget! You can still enjoy a few things now and then, even if you are trying to become more frugal.
Budgeting is Impossible to Remember
If you are trying to physically budget each month and hate math, of course, you are going to dread learning how to budget. Instead of using a physical pen and paper to get the job done, you can use online budgeting templates or apps to do the hard work for you! Simply let the app know what your monthly gross income is (or what it is estimated to be if you do not receive regular paychecks from an employer) and what your fixed / variable expenses are estimated to be per month. The app, or template, will handle the legwork, and all you will need to do is consult the budget and make sure you are staying on track. In some cases, you can link your bank account and credit cards to your budgeting app, which allows you to fully track your spending!
Unexpected Expenses Will Always Throw Off a Budget
While it is true that unexpected expenses can knock your budget out of wack, one of the primary goals of a budget is to help you prepare for the unexpected and help you make the most of your income. By implementing an effective budget, you can cut out unnecessary expenses and hopefully save a little bit of money. The money that you save from cutting out unneeded subscriptions or expenses can go straight into an emergency fund. You can use this money whenever you have a rainy day and need to pay for a car repair, home renovation, or even emergency surgery. It’s recommended by many financial experts to have at least six months’ worth of expenses saved in your emergency fund. This way, you’ll be prepared for any unexpected expenses. Additionally, an emergency fund can provide you with peace of mind in the event that the unexpected happens. Being financially prepared is important, and although you shouldn’t always expect the worst, you should aim to be prepared for it.
I Make Too Much Money to Need a Budget
A budget is essential whether you are upper, middle, or lower class! Think of a budget as a plan for your money. Planning for your money gives it purpose, and helps you get closer to your financial goals – whether your aim is to save, invest, or become financially stable. Unless you’re a billionaire, there’s no such thing as making too much money to budget. Budgeting is an essential part of achieving many different financial goals, including becoming debt-free. It helps to ensure that you spend less than you earn and that you have enough money for unexpected expenses.
What if I Can’t Budget on My Own?
Budgeting can often seem like a stressful process, and doing it alone can be impossible if you aren’t prepared. Try searching for a financial advisor (or even a trusted family member or friend) who can sit down with you and show you the ropes! If you feel like you can’t afford your current lifestyle and need a loan to get yourself back on track, a title loan could be an option to consider. Search title loans near me to find options local to you. Discuss your financing options with a professional and figure out what works best for you and your situation.