Budgeting is the key to achieving your financial goals. It can be overwhelming, but you don’t have to be one of those people who fall for budgeting myths and excuses, which can be a hindrance for you to come up with a reasonable monthly household budget. Here are some of the commonly heard ones.
Myth 1: You have to be better at math
This is false. All it takes is a little addition and subtraction, and you can set up a budget. Add up your income and expenses separately. Then subtract your total expenses from your total income. As long as the difference is not negative, you don’t have to worry.
Budgeting tools are also available for you to help avoid the stress in the process. No degree in rocket science required! Once you get the hang of it, doing math to budget isn’t bad at all.
Myth 2: You have a job, so you don’t need budgeting
If you think doing a budget is only for those who have trouble making ends meet, you’re dead wrong. No job is truly secure. So it’s better to still have a budget and allocate your money properly to your regular expenses.
There will also be urgent costs at some point. You won’t regret that you have kept building a safety net for rainy days.
Myth 3: Unemployment benefits scheme will cover you
Australia’s unemployment benefits scheme is set up to support people who are truly in need. It also encourages them to return to or join the workforce.
If you’re out of work and secured unemployment benefits, there’d still be a waiting period before you get hold of the fund, so you cannot rely solely on these benefits. This is where savings come in.
Myth 4: You’ll feel guilty
In its simplest form, budgeting is tracking your spending more closely. Ideally, you put aside a small portion or 10% of your income in savings .
You can still dine out or watch movies with friends once a week without feeling guilty. But, make sure you’re not spending more than you earn.
Myth 5: There’s no major thing to save for, so no budgeting required
Without any specific savings goals, there’s no motivation to put that money into savings each month. False! You’re always saving for something, you just don’t know it yet. A new home or car doesn’t have to be a rush purchase. But, there’s no harm in saving for it for the future.
If you liked our “5 Budgeting Myths Debunked!” and find it useful, check our blogs regularly for more info on how to get out of debt and updates on the best budgeting apps in Australia.