Unmasking common misconceptions that keeping track of money and budgeting is boredom and constant self-restraint. Find out how myths spoil your financial life.
Many people find it difficult to organize their personal finances, and the problem is aggravated by the fact that myths circulate around them that confuse them. Don't let this happen to you. Today, we will expose common misconceptions, and you will see that accounting for money and keeping a budget is not an absolute evil, and everyone, regardless of their financial situation, can benefit from it.
Myth 1: Keeping a budget means giving up pleasant purchases
One of the most ingrained myths about budgeting is that it is a test of strength and an ascetic lifestyle. That you will have to give up all the pleasant things, like restaurants or shopping, and you will never be able to enjoy your money again.
With this mindset, you will surely throw your budget away. Rather than thinking of budgeting as a sacrifice, imagine that it is a plan that helps you do exactly what you want with your money. Think about how he could help you. Maybe you want to get out of debt in order to travel the world, or maybe you just want to help more your family that you love so much. Regardless of your answer, you will find that if your budget has goals, it helps you much more than it limits anything.
When you are organizing your finances, you prioritize your spending. You take into account the necessary expenses (food, rent), and then use the remaining money for those things that bring you the most happiness. Reduce costs for everything else.
Myth 2. Financial planning must be rigorous
A good plan doesn’t have to be strict, it has to be realistic. For example, you want to pay off your loan debt as quickly as possible, and you have a plan that leaves no room for fun and entertainment. All your money after paying bills and buying food goes to pay off debt. How long can you stick to this plan? Most likely, it will fail soon.
Instead, allow yourself a little freedom. Include a little extra spending in the plan, and the likelihood that you can stick to it and achieve your goal is much higher. This does not mean that you should continue to spend money indiscriminately, but it takes time and patience to practice learning how to properly handle your finances. Try to cut costs gradually, one at a time, rather than cutting everything at once.
Myth 3. I have too little money to consider anything
Many people believe that only rich people should be involved in organizing finances. And if there is no money, then there is nothing to count. The truth is, if you are short on money, then budgeting is especially important. This is a way for you to make the most of what little is available. If you want to improve your situation, then without knowing the numbers, you will not be able to figure out how to do it in the most suitable way for you.
Myth 4. Only people who can hardly make ends meet need to keep a budget
On the other hand, you may think that you do not need to deal with your finances because you are doing well anyway. In fact, until you become a billionaire, your money is still limited. Financial planning will enable you to make the best use of them.
And even if you get a pay raise or a nice bonus, don't throw your plan away. An increase in income is often accompanied by frivolous spending, a desire to improve one's social status in the eyes of others. Having a financial plan will allow you to take control of this temptation and channel additional income towards achieving the goals that are really important to you faster.
Myth 5. Planning and budgeting takes a lot of time and effort
Indeed, the initial financial plan will take a certain amount of time and effort. When you start out, you learn about planning, cost accounting, goal setting, and all of this needs to be thought about.
But after you have thought and prepared everything, keeping a budget will not take up much of your time. Moreover, now there are special services and mobile applications that allow you to automate some of the actions, and you only need to control the process as a whole.
But that time spent on budgeting can make a big difference in your financial life.
Myth 6. There are still unforeseen expenses, so planning a budget is a waste of time
If you feel like budgeting and financial planning doesn't make sense, then you are probably doing it wrong. If you have unpleasant surprises every month, it means that you are not taking everything into account in your plan. Do not forget about items such as the annual purchase of car insurance, veterinarian costs, taxes, minor apartment and car repairs. If you find that some unexpected costs occur regularly, then it is probably worth adding a new category to your budget.
