There are people out there who believe that they don’t need a budget. So you have no income and no expenses then? Or is it that you’re so good with numbers in your head that it’s not worth your time to write them down? Or maybe you make so much money you can’t possibly spend it all? We’re done with the money myths.
Everyone needs a budget. Even if you’re a Richy Rich, knowing where your money goes makes good sense. But you know that. Because that’s how you got to be a Richy Rich.
Sadly, it’s usually the Poor Richards who think that having a budget isn’t worthwhile. Yet they are the very people who most need one. Keeping track of your monthly income and expenses lets you make sure your hard-earned money is being put to best use. With limited resources, knowledge is power.
If you find yourself voicing any of the following money myths, give your head a shake:
I’m no good at math so I can’t make a budget.
Just because you add one and one and get three is no excuse to give up on managing your money. Buy yourself a calculator (or use the one on your phone). With all the great budgeting software available, you don’t have to be good at math, you just have to follow the instructions and type in the numbers correctly. Or you can use a spreadsheet to create your own budget.
There’s always more money.
If you think a “secure” job is the solution to having a budget, you’re a dope. No one’s job is truly secure. You could be downsized. You could have your hours cut at work. You could get sick. Being prepared for having less money means saving up at least six months’ worth of essential expenses. As for all the folks who bank on those annual raises or bonuses that come fast and furiously during the good times, might I remind you that the bad times inevitably bring disappointments. Sometimes even pay cuts. Banking on something that “should” happen is a sure way to put yourself at risk.
Unemployment will tide me over.
Have you ever looked into what unemployment insurance pays? Talk about having to adjust your expectations! And, besides, getting a cheque isn’t a sure thing. If you haven’t worked enough hours to qualify you’re SOL. And if you hate your job – or the boss ends up chasing you around the desk – and you quit, you’re SOL. Whatever reason you may have for “voluntarily” leaving your job, it’s very likely you won’t see a penny. And don’t think getting yourself fired is the cure… you likely won’t see a penny either since being turfed for bad behaviour will disqualify you too. Never mind the fact that no one else will want to hire you. And then there’s the EI wait period; whatcha gonna eat for those weeks while you wait for your first cheque?
It won’t happen to me.
Are you kidding me? If you think unexpected bills and misery simply can’t come your way, you’re delusional. All kinds of things go wrong in life: cars break down, lovies get sick, companies go belly-up. Hoping for a great life is one thing. Banking on nothing ever going wrong is just plain dumb. If you want to live like an optimist, you have to plan like a pessimist so all your bases are covered and you’re ready for the next curveball that life throws at you.
I hate depriving myself.
Oh grow up! First off, it’s not “deprivation” if you’re making the choice to spend your money on things you’ve planned for. Budgeting is not synonymous with feeling guilty about every purchase. Nor does it require that you spend as little money as possible on yourself. The point of budgeting is to make a conscious decision about where your money is going, not letting it just slip through your fingers. If you discover that you don’t make enough money to cover your expenses, save something for the future and have all the fun you want, that’s a wake up call to find a way to make more money.
Tracking your expenses doesn’t change the amount of money you have available to spend every month, it just tells you where that money is going. If you choose to remain ignorant so that you can spend money you don’t have (using credit) with no hope of ever paying it off, you’re an idiot.