Demystifying the budget myths – Throwing light on the facts

By Benjamin Beckwith

Americans hate the B-word budgeting and this is the most probable reason behind the soaring debt level in the US. They are of the opinion that budgeting means living life by pinching pennies but this is the not the actual fact. Budgeting doesn’t deal with pinching your pennies, it rather deals with making the best use of your dollars so that you may have enough to fall back on during times of emergency. The closest people can get to budgeting is by depositing their paychecks into their checking accounts and spending everything with the ATM cards until the entire money is over. Even though budgeting is a wonderful tool for tackling your finances, there are many Americans who think that it is not their cup of tea. Have a look at some budget myths that you shouldn’t believe in.

  • I don’t require following a budget: This is the biggest myth that the Americans love to believe in. However the truth is that everyone with thick paychecks and with lots of money in their banks an actually benefit from a budget. When you keep track of your income and expenditure, you can ensure that your hard-earned dollars are being put to the best purpose. For instance, when you know how much money you exactly spend on restaurant expenses, you can decide how much you require saving in order to plan a better vacation this year.
  • Since I’m not good at math, I won’t be able to manage a budget: This is yet another myth about budgeting is that you require being good at math and calculations. But did you hear about the budgeting software through which you can simply follow instructions and formulate your own budget? Most of the programs are free and are also available in the Internet. If you know how to use a spreadsheet software, you can also use a budgeting one.
  • My job is secure and hence I can move on without a budget: There are many who believe that one should follow a budget and save money only when his job isn’t secure and he has lots to spend in the long run. No ones job is actually secure. With the present tough conditions of the economy, losing your job or being subject to downsizing is always a looming possibility. Therefore, it’s lot easier to accumulate wealth and then take care of it through a budget.
  • Fiscal tragedies won’t happen to me: Yes, some other are overconfident that they won’t ever be subject to tragedies that might leave them financially trashed. But did you know that among the large number of things that could go possibly wrong in our lives, financial tragedies take the first place? So, it is mere foolishness to believe that nothing is going to happen to you and therefore avoid following a budget. It is always best to be prepared for the worst but to hope for the best.
  • I don’t need to save as I won’t buy anything big: You never know when you need to spend on a huge expense like a home or a car and hence falsely believing that you won’t need anything big is a wrong notion again. Always keep saving as much as possible so that you don’t have to rush to professional companies for help.

Budget is the key to obtaining financial freedom. Hence, always follow a budget to maintain a close track of your income and expenses and avoid incurring debt.

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