For the past few years, I have thoroughly enjoyed budgeting. Part of the reason for my enjoyment is my inner desire from childhood to always be an adult. But, the other part is that I really enjoy working towards and achieving financial goals. The first time I was able to max out the annual contribution to my Roth IRA was an exciting moment because I know I am working towards financial security.
Budgeting is the same way for those who understand it properly. Most of the time, however, people don’t understand the benefits or positive aspects of making a budget. The negative connotations often associated with it often hide the positive aspects of budgeting and push people away. It is my belief that society has slowly formed popular myths about budgets that make it impossible to embrace fully.
Proof of this fact is evident in how personal finance bloggers talk about budgets. Many people refuse to call it a budget because of the negative connotations and insist on calling it a “spending plan.” Regardless of what you call it, it is important to consider your future financial welfare. Below are several myths about budgeting and why they aren’t true.
Budgeting is Not Fun
Most people think that budgeting is not fun. It’s just something that you have to do. I, however, think back to my childhood when my friends and I went around the neighborhood to wash cars. Not only did we have a lot of fun washing the cars and staying active as children, we also made some decent money. The money that we earned went directly towards buying more regular Nintendo games. There’s a lot of excitement in saving up for something that you really want. A big part of budgeting is prioritizing your spending, and limiting the unnecessary expenses so that you can buy what you really want. What part of that isn’t fun?
Budgeting Takes a Lot of Work
Another popular myth is that budgeting takes too much work. Not only is there the aspect of tracking your expenses, but also evaluating how much you spent and setting goals for next month. The reality is that it can be as complex as you want it. A big part of budgeting is making it your own, which includes establishing how much time you are going to spend on it. You can easily create a simple budget without too much time commitment.
Budgeting is Too Complicated
Similar to the time and work required myth, people often put off setting up a budget because it is too “complicated.” If by complicated they mean commitment or accountability, then that may be true. The truth is, in my opinion, budgeting should be an important role in managing your finances. If paying attention to what you are buying and trying to limit your spending is too complicated, then you are probably going to have a difficult time funding future goals like retirement or buying a home.
Budgeting is Too Limiting
Many of my friends have also told me that budgeting makes them feel like that can’t enjoy themselves. They suddenly feel guilty about that trip to get frozen yogurt or an occasional date night. Again, budgeting is flexible. You can determine what works for you and what doesn’t. There is no hard and fast rule about what you can spend where. With budgeting, you set the rules. You are in charge of your money and you will only be as successful as you want to be.
While people may be put off to budgeting, it is an important step taking control of your finances. It’s something that you can control at your own pace and be as elaborate or basic as you want it to be. Making it your own is the only way that you will achieve long term financial success. Otherwise, you will get burnt out trying to live up to someone else’s expectations.
What other myths make budgeting unattractive?
This was a staff post written by Corey from 20’s Finances. He writes to help young adults take charge of their finances.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.