After posting my family’s one-income budget and reading the comments, I discovered that there are several misconceptions on budgeting. Many people think that our budget is set in stone and that every month our utility bills are exactly those numbers and that our grocery bill is always the same – it is not.
There are some months where we spend more on groceries than others and there are some months where we have to completely re-do the budget in order to accommodate for changes. For example, whenever we are invited to baby showers, wedding showers, weddings, or birthday parties. Those events obviously mean that we will need to bring gifts and as such, if our gift stockpile does not have anything that we can give, we have to adjust the budget in order to accommodate for those gifts.
Budgeting misconceptions I believe cause our budgets to fail. We believe too many times that if we simply make a budget that our money will manage itself instead of understanding that we have to do the work in order for our money to work for us.
Maybe you are guilty of some these common budgeting misconceptions?
Maybe it is my OCD tendencies, but I always want our budget to be perfect and maybe you are the same way. Maybe you want your budget work perfectly month after month and week after week, but it doesn’t and then you give up. Instead of focusing on having the perfect budget, try focusing on accounting for all your expenses every week and month. Working to gain perspective on how you spend your money will help you keep your budget as close to perfect as possible.
When I started budgeting, I used to just use guessitmates of my monthly averages and that caused my budget to fail more times than I can count. Instead of taking the easy road and just making up numbers, do the legwork and take the time to calculate averages based on your spending habits from the last three months. Taking the time to do this will ensure that your budget has a higher likely hood of succeeding.
Last year was the first time I shared my family’s budget online and I realized quickly a huge mistake that I had made in our budget – I avoided including my husband’s cigarettes. We all have a vice, whether it is a shopping addiction, a smoking habit, daily Starbucks run, or something else and if you avoid including it in your budget, you will cause your budget to fail every time.
4. Forgetting the Power of NO
One of the greatest advantages of having a budget is the power of being able to say “no” to something that is not in the budget. Unfortunately, too many times others see this as a negative side effect of a budget when in reality; it is freedom from saying “yes” to things that do not contribute to your overall happiness and your long-term goals.
Allow your budget to work for you and give you the freedom from saying “yes” to every whim.
5. It’s Complicated
Let us be honest, we live in a society that worships busyness and thrives on complications. We seem to have forgotten that life was never meant to be overly complicated and neither were our budgets. When my husband and I were first married, I decided to start using some of my business accounting knowledge and make a super detailed, overly complicated budget. I thought that by following those recommended percentages to a “T” that our budget would somehow work wonders.
What I did not realize was that the more complicated I made our budget; the less we stuck to it. I mean, who really likes complications? Why make something that should really be a simple process, complicated? If your budget is so complex that you are struggling to stick to it, go basic and make a simple budget of income versus expenses. Instead of breaking out your clothing category into “Mom, Dad, Kids, Gifts, etc. “, keep it simple and just make a “clothing” category.
A budget does not work if you do not work, period. You cannot expect to make a budget and then have your money magically work for you. It simply will not happen. You have to actively manage your money by sticking to your budget and updating your budget as needed. If you fail to do this, your money will fail to work for you and you will instead become a slave to your money.
These are just a few of the budgeting misconceptions that I have personally encountered and I am sure that you have encountered a few others. No matter how many times your budget fails, it is imperative that you work to figure out what went wrong and that you fix it. That is the only way to keep your budget working for you.
What are some budgeting misconceptions that you have encountered?
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