Budgeting for your future can seem daunting at best and impossible at worst. However, when you analyze the situation accurately and break down financing into smaller digestible pieces, you will be amazed at how easy it can be. Below we will dispel some common myths that prevent people from creating a financially stable future for themselves.Photo by: Hans Splinter
You Don’t Have the Time to Budget
Most people have a number of daily habits that are far less important than they realize. People waste time constantly, and a little bit of self-reflection and honesty will help to decipher what matters and what doesn’t. Making a budget should be an absolute priority. Nobody wants to deposit a paycheck only to realize their savings account hasn’t grown at all since last month’s check was deposited.
Consider observing your daily routine and examining what could be optimized for better spending. If you go to the gym every day, perhaps you could save on gas and membership fees in the long term by purchasing exercise equipment and putting it in your basement. Likewise, if you eat out every day at lunch, take a few extra minutes to simply pack your lunch instead.
Student Loans Cannot Be Optimized
With costs of higher education on a seemingly endless upswing, financing the debt is often something people want to avoid thinking about. However, a little mindfulness in regard to your loans can go a long way. Certain services can offer a number of unbiased choices for different credit cards that can help make student loan payments a breeze. Perks may include cash back, low interest, or rewards for good grades.
Financing Involves Complex Math and Too Much Time
It’s easy to delude yourself into thinking that figuring out your finances isn’t worth the hassle, but nothing could be further from the truth. In addition, thanks to smartphones the duty of financing is easier than it has ever been. Simply using notepad and calculator apps can put you ahead of the game, and both of these often come standard with your smartphone. In fact, you might even be able to put Microsoft excel on your cell phone, giving you even more ability to stay organized on the go.
Budgeting Isn’t Worth the Bore
Budgeting might not be the most captivating thing in the world, but it sure beats sleeping in your car or at your friend’s house because you lived outside your means and were evicted. Once you get into the habit of creating a budget, the process becomes gradually less painful.
If you find the task to be too overwhelming to tackle alone, see if you can get a mathematically-inclined friend or spouse to give you a few pointers. You might be surprised at how the tasks that put you to sleep are interesting or even fun to other people. Staying on top of your budget means getting out from under debt as soon as possible, and that’s something to get excited about.
You may also want to consider methods like goal-setting to improve your level of engagement in regard to your budget. Studies show that goal-setting can increase favorable attitudes toward a task, so perhaps set a vacation fund aside to reward yourself for persistence in your financing.
I Don’t Need to Budget Since I Keep Track of Everything I Spend
While keeping track of your expenses is certainly a good habit, it does nothing in terms of looking toward your future costs. In other words, you are looking backward and never forward.
A true budget serves as your plan for the upcoming month. In this way, not only will you be looking back at your expense history for perspective, but also poising yourself for the costs you have yet to incur. Make sure that you account for possible contingencies, and you will be ready to take on the world.
Budgeting Is Too Restrictive
Don’t think you need to give up every indulgence you hold dearly in order to properly budget – but put it in the budget. This will allow you to prepare for the future and organize your expenses and earnings to accommodate the lifestyle you desire.
Contrary to what you may think, budgeting for your cherished coffee and bagel or happy hour drinks will actually give you more freedom. When you account for these costs ahead of time, you can rest easy knowing these expenses are well within your means, as opposed to getting sticker shock when looking over your credit card history after a hazy weekend.
There Will Always Be Unexpected Costs, So Why Bother Budgeting?
While life is unpredictable to a degree, upon further investigation, you may discover that the “unexpected costs” often turn out to be pretty easy to anticipate. You ought to know ahead of time when your car registration is due, or when your girlfriend’s birthday is. Christmas occurs in the same month every year, and so does Valentine’s Day.
If looking into the future with a bit of common sense still isn’t enough, perhaps all you need is a “miscellaneous” category within your monthly budget. In this way, an unexpected financial setback can be accounted for.