5 common budgeting myths

Budgeting gets a bad rap. People hear just the word alone and want to run the other way. This may be due to failed attempts at budgeting, but largely it is due to misconceptions about budgeting.

These are five common budgeting myths.

1. You Need to Have a Surplus of Money to Budget

Many people believe they cannot budget until it is clear that they make more than enough money to cover their expenses.Those who wait for an obvious stare-at-you-in-the-face surplus of income do so in vain. If the margin between what you have coming in and what is going out is slim or non-existent, then you will likely never see enough of a difference between the two unless you intentionally plan how you're going to spend your money so that you can ensure there is a difference — which is budgeting.

2. Living on a Budget Means You Can't Do Anything Fun

Some who shy away from budgeting believe that living on a budget means they will be sentenced to a dreadful, austere life — void of any fun or joy.

Sound a bit extreme? It is. And so is the belief that budgeting = boring. In reality, budgeting is synonymous with planning. Do you like to eat out? Budget Plan it. Do you need to go clothes shopping? Budget Plan it. Want to go away for a weekend? You get the idea. The point is a budget is a plan for your money, not a prison. You are in control, and you get to decide what goes into your budget.

'Close up of an empty, open leather wallet with an I.O.U. message in it on a white background.'

3. You Only Need to Do a Budget Once

A common misconception of budgeting is that it only needs to be done once. Many people do a budget at the beginning of the year and expect that budget to work every month.

In reality, no two months are exactly the same. While a majority of your expenses are likely to remain constant, there are several variables to consider every month such as holidays, social events, doctor visits, clothing needs, and fees for children's activities, just to name a few. These potential expenses make every month different, which calls for a new budget each month.

4. Budgeting is Adding Up What You Spent at the End of the Month

Many people mistake tracking expenses for budgeting. In response to being asked if they budget, they respond by saying they add up everything to see what they spent in each category or that their credit card statement shows them their spending.

This is not budgeting. This is tracking. Tracking expenses can be worthwhile when you first start budgeting to give you an idea of what you've been spending your money on and to help you see how to adjust your budget in the first few months of budgeting.

Outside of that, though, adding up what you spent after you spent it is literally after the fact. The money is spent. You can't do anything about it. Budgeting is all about being intentional and proactive — and planning.

5. You Can't Budget With Irregular Income

A lot of people declare they are "exempt" from budgeting because they work in sales, are self-employed, or have an irregular income for another reason.

Having an inconsistent income does not mean budgeting will not work; it simply means your approach may be a little different. There are two approaches you could take. The first is to do your budget based on the amount you know you are guaranteed to receive, and then adjust the budget when you know your actual income.

The second option is to do your budget based on last month's income. This way there are no surprises, and you know exactly what income you're working with. Getting to a place where can use last month's income to budget this month's expenses may take a little time if you are not there currently.

Give yourself a time goal to get there. For example, if you gave yourself four months, then each month, you would need to save about a fourth of your average monthly income. Use any bumps in income like bonuses or higher commission checks to help you get there.

Mixed race woman saving money in jars

Budgeting Facts
So we've explored some common budgeting myths and what a budget isn't. Now let's touch on some budgeting facts.

1. Budgeting is Planning
As mentioned above, a budget is simply a plan — a plan for your money.

2. Budgeting Will Give You a Sense of Control
Have you ever asked yourself where all your money went? A budget eliminates that because you already decided where your money was going to go.

3. Budgeting Will Make You Feel Like You Got a Raise
This is a budgeting phenomenon. Living on a budget will have a similar effect to getting a raise. Because you are being intentional about where your money goes, you will see that you have the money to take care of the things you need to.

Give Budgeting a Try

Have any of these budgeting myths kept you from budgeting? If so, I encourage you to give budgeting a try. I suggest committing to it for at least three months as it will take about that time to feel like you have the hang of it. Every month will be better than the last, though, so don't give up!

The article 5 common budgeting myths appeared first on Hope + Cents

RELATED: How to improve your finances using social media

How to improve your finances using social media
See Gallery
How to improve your finances using social media
"Friend" Your Credit Cards and Bank

Add your credit card issuers and bank to your social media accounts by "friending" or following them. Large institutions usually offer deals to followers, so you can enjoy a lower APR, higher savings interest rate, or other money-saving promos. In fact, according to U.S. News, social media is often the first outlet that banks choose to share news about upcoming deals.

Social media is also possibly the best way to get in touch with customer service quickly, as it will allow you to get their attention more easily. Just make sure to keep your account information, address, and any other private information off the message boards and social media pages.

Photo credit: Getty

Enjoy Travel and Shopping Deals

There are endless travel and shopping deals available through social media. Retailers often choose social media as the first outlet to announce upcoming sales, so their friends and followers are able to take advantage of the biggest discounts first. Followers are frequently offered early deals, as well.

You can find Twitter-specific deals that can save you on everything from rental cars and vacations to eating out and even buying gifts. Before going out to make any purchases, check Facebook, Twitter, Instagram, and Pinterest to make sure there aren't any deals that you're missing. You can even check social media hashtags, such as #deal, to find the best deals in your area.

Photo credit: Getty

Share Goals

Many financial experts recommend sharing your financial goals online. By setting your goals early and sharing them with the people you love, it can help you articulate what you really want and hold you accountable to achieve your goals. In fact, research has shown that making public statements about goals can help you achieve them more efficiently. However, you never want to reveal anything too personal, such as private information that fraudsters can use against you.

Photo credit: Getty

Get Money-Saving Tips

By following your favorite finance site on social media, you can find endless free money-saving tips and updates. You can also find forums and group discussions with unique money-saving ideas and encouragement from others. You can even find good financial and investment advice online.

Seeing these tips on a daily basis on your social media pages can also be a good reminder each and every day to protect your hard-earned income. After all, we all need a reminder once in a while that we don't really need that new top or expensive latte in the morning.

Photo credit: Getty

Find a New Job

LinkedIn can be an invaluable tool when you're searching for a new job. You can apply for jobs directly through LinkedIn, perfect your resume, and even reach out to potential employers and former colleagues. Contacting them through Facebook or Twitter won't be as effective or as professional as contacting them through LinkedIn.

With LinkedIn, once you have created a professional profile, employers and recruiters can even reach out to you with potential job offers. You can also join LinkedIn groups within your field so you are the first to know about potential opportunities. You can even add examples of your work, recommendations from current or previous coworkers, and any honors you've received to better build your online portfolio.

Photo credit: Getty

Make Connections

Networking through social media can result in better face-to-face communication, potential job offers, and endless contacts in your field. Simply following someone or sharing their social media posts can be a great first step in networking and making connections.

Photo credit: Getty

Build Your Brand

Whether you're promoting your personal business or services, or just want to build your reputation as the best in your field, posting on social media can be a great start. Just make sure to stay consistent so that you can reach as many followers as possible.

Photo credit: Getty

Research More Efficiently

Gone are the days of asking for financial suggestions from friends and coworkers. Whether you're looking for a new financial planner or would like information on which investments to make, you can find more information quickly through social media. With a simple social media search, you can find detailed research on the investment product or financial adviser you're interested in.

You can also find suggestions for dentists and other service providers in your area through social media. This will ensure you get what you're looking for and don't waste money.

Photo credit: Getty

Sell Your Items

If you create and sell items privately, such as through Etsy, social media can be a great free platform for you to advertise your products or services. This can help you bring in more revenue, reach new customers, and show off your work to a limitless audience.

Photo credit: Getty

Make Some Extra Income

There are even ways to make some extra income using social media. If you have a large following, you can publish sponsored tweets or sign up for affiliate accounts, where you will receive your own unique link to earn some extra income when followers make purchases using that link. (See also: 6 Ways to Make Extra Money Using Social Media)

Photo credit: Getty


Read Full Story