3 Budgeting Myths Preventing You From Achieving Your Financial Goals

Every single person on a planet needs a budget. It's a basic necessity of life, and has been ever since we started trading livestock for grain seeds. You need to figure out what you have, what needs to be paid for, and what you can save. 

However, about 23% of Americans operate without budget, according to a recent survey by Nerdwallet and conducted by The Harris Poll. Even so, while the same study found 74% have a monthly budget, 84% of those Americans with that budget exceed it on a regular basis. You know what that means? You did all that work, and have completely ignored it.

So let's get into some myths surrounding the creation of a budget, and solutions so you can not just get started, but keep your budget in check for years to come.

Myth 1: A budget is too restrictive

This perhaps might be one of the top reasons Americans aren't creating a budget. It can be considered far too restricted by some. After all, you're sitting down to figure out how to not spend money, right?

Actually, wrong. What you're calculating is where your money is going to be spent month after month. At the end of it, you fear you won't be able to go get that daily morning coffee!

Yet that's not the case. If you need your daily coffee, that goes in the budget. A budget isn't meant to deprive, it's meant to write down all essentials, plus things you enjoy. Even if that includes weekly takeout, or taking your partner to the movies.

Sure, there may also be unexpected expenses, but that does not mean your budget should suffer. Instead, there are a few ways to prepare. First, look up items that aren't unexpected exactly, but one offs. That might be a wedding, car oil change or the holidays. Put it in your budget and plan for those items.

Furthermore, have a portion of your budget go towards an emergency fund, which can be incredibly helpful during an economic downturn. That way, should you suddenly need to fix your car if it breaks down, you'll have funds available without worrying about your budget.

Finally, if you're still concerned about being restricted, create a reasonable amount of funds you can have for miscellaneous items. Say that dress you want is finally on sale. Your friend invites you to a day of golf. Those funds can be used to pay for it that month! Just remember, don't abuse it, and be sure all other items of your budget are paid for first. Including money to put aside for your future goals.

Myth 2: I've had a budget for years, I don't need a new one

Yes, it might seem that if you've had a budget that you worked hard on in the past, you may not need one now. You created your list of items, everything from property taxes to your child's tuition, and so you're set! But let me ask you, did that tuition rise? How about property taxes? Then there's these days filled with increased inflation and interest rates. How has that affected your bottom line?

The point isn't to scare you, but it's to look back at your income and spending every three months. That's every quarter of the year, as bills change, perhaps you earn more money, and other costs that come in that don't line up with your current budget.

It doesn't have to be a burden either, but exciting! Looking at your budget every three months allows a few things. First, it can give you pride if you've been staying within your budget. Plus, you can look at how much money you've been putting towards your future finance goals.

Doing this not only will keep you in line with your budget, but motivated to continue working towards those long-term goals.

Myth 3: Making a budget is too difficult

You have a busy life, perhaps with a full-time job, children, and a laundry list of chores to do including, yes, laundry. How on earth are you going to set up a budget?

Here's the great thing about the internet. There are budgeting tools and applications all over the place! These can be free to add to your phone to help you not just create a budget, but stick to it. Therefore, you'll save time on creating the budget in the first place, and have an outside source keeping you in check.

But let me be clear, it's also not as difficult as you might make it out to be. Budgeting doesn't mean getting your PhD in calculus. It's simply adding up your spending, and taking that away from your monthly income. If you're over, look at where you're spending needs to be cut back.

By doing this, whether on your own or through an application, you'll end up with more money at the end of the day. Money that can be used in an emergency, retirement, or even taking that trip you've always wanted!

A budget isn't mean to be a chore, though it can feel like one. Instead, it's supposed to be liberating. And creating long-term income and becoming debt free? Those are perhaps the most liberating items of all.