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4 Myths About Creating a Budget

This is a guest post by Deacon Hayes, the founder of WellKeptWallet.com. He has been featured in the US News and World Report for paying off $52,000 in debt in 18 months. It is his goal to get you from where you are to where you want to be with your finances.

When you are looking to put together a budget for the first time, it can seem like an overwhelming task and it can be easy to put off doing it. Because there are so many myths surrounding budgeting, it can be a challenge to get started. Let’s go over those myths so that we can break down any barriers you might have to doing a budget.

 

Myth #1 - Budgeting is Restricting 

Many people think that doing a budget gives you less freedom because you are putting limits on each category that you spend money in. The truth is that you are actually giving yourself more freedom because you are empowering yourself to achieve your financial goals in life. When you create a budget, you now are in control of your financial destiny and can know with certainty whether or not you can afford something.

  Myth #2 - Budgeting is complicated 

The budgeting process can be complex, but only if you make it that way. When you are starting out for the first time, it can take some work on the front end. But when you get going, it does get easier and easier as time goes on. This is because after you have done the initial budget, you have laid all the ground work by entering all of your fixed monthly expenses like your mortgage payment, car insurance, etc. Then all you have to do is input your variable expenses like groceries, entertainment, and gas on a monthly basis. It really is not complicated to create a budget as you are just putting numbers on a piece of paper.

  Myth # 3 - Budgeting is time consuming 

This is one of the biggest myths about budgeting. To show you that it is possible to create a budget in 10 minutes or less, I put together the Starter Budget form. This form is designed to make budgeting quick and easy, so that you can get started with a budget in a short period of time. 

Myth #4 - Budgeting won’t fix your financial situation 

You might think that budgeting is not the solution to your problems. Well, it might not be the entire solution, but it is part of it. Putting together a budget exposes areas where you may be overspending. This then allows you to make the necessary adjustments to achieve your financial goals. For instance, if you create a budget and realize that you spend $700 per month on groceries, you are now aware of an area that you can cut back. In fact, you might be able to save around $500 per month just by cutting back in this area if you knew that there was a family of four that spends only $200 per month on groceries. That is now money that you can use to pay down debt, invest for the future, etc. 

Image via Tax Credits on Flickr.

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