How to Budget

March 23, 2020

7 Budgeting Myths You May Be Falling For

By Priya

March 23, 2020

I love budgeting, but budgets have a bit of a bad reputation. Many people dismiss them as being boring, difficult, restrictive or unnecessary. Chances are, you may be falling for a few of these budgeting myths. They probably come from people who don’t know how to budget properly or understand how powerful budgets can be.

However, I’ve been budgeting in some form or another for as long as I can remember. I’m here to debunk these budgeting myths! Because here’s the truth: budgets are the foundation on which lasting financial freedom is built.

Learning how to budget correctly will honestly change your life and transform your finances. It puts financial freedom within your reach. It’s the main thing that will turn those dreams into a reality – so, get ready for some tough love!

Budgets are too restrictive

This is probably one of the most common budgeting myths. If your budget is too restrictive, then you’re doing it wrong. It’s as simple as that. A budget is restrictive when it isn’t an accurate and realistic representation of your life and circumstances. And if your budget doesn’t reflect you and your life, it will always fail.

Because money doesn’t spend itself – you spend it. It’s your personality, your circumstances and your life that determine how you spend your money. Therefore, if your budget isn’t a realistic reflection of your life and who you are, it will always be restrictive.

For example, one of the things I’m constantly working on is reducing the amount of comfort spending I do. When I’m stressed, depressed, anxious or upset, I turn to comfort eating to make myself feel better.

I know this about myself. If I don’t allow for eating out when I create my budget, I’m already setting myself up to fail. Because that isn’t how I live my life. I know I’m going to comfort eat, so I allow for it in my budget.

Your budget must always represent your life. Otherwise, you’re just trying to be someone you’re not and live someone else’s life. It shouldn’t surprise you that your budget feels restrictive because it doesn’t make sense for your life. To overcome this, you need a budget that reflects your life, your circumstances and the decisions you make.

Read more: How to Determine Your Budget Categories

I’m not good with numbers or at maths so budgeting is too hard

And now for some tough love. If you’re going to make excuses with me, you’ll have to do better than this. This is one of the most frustrating budgeting myths, and I can’t wait to debunk it!

Not knowing how to read and understand numbers is all the more reason to create a budget and start learning. I know it might seem easy for me to say – understanding numbers is literally my livelihood. But I’m an accountant, not a numbers whisperer. And I wasn’t born with the ability to understand numbers – I learned how to understand them.

It’s perfectly okay not to know how to read numbers when you first start budgeting. But that doesn’t mean you can’t or shouldn’t learn. If you can’t understand your own money you have no control over it. In order to take control, you need to be able to read and understand your own numbers. You need to educate yourself. You can always ask me questions in the comments or via email!

Use your calculator

Further, I don’t care how “bad” you think you are with numbers and maths. You don’t need to be a mathematician to work a budget. That’s literally what a calculator is for! They were invented to perform calculations. Your job is to understand what the numbers are telling you, to listen, and then to take action. Consider this budgeting myth debunked!

I use calculators and spreadsheets every single day of my life, both at work and at home. I’m not good with numbers. I still count on my fingers! But it doesn’t matter because I use my calculator. Use the calculator on your phone or get started with Google Sheets.

Budgeting is only for people who are struggling financially or are in debt

If you want to be in control of your finances and achieve financial freedom, then you need a budget. Because that’s the truth. Budgeting isn’t only for people who are struggling with money. It isn’t a magic potion that’ll solve all your money problems.

A budget is nothing more than a plan for your money. Not having a budget is like trying to do a puzzle while wearing a blindfold. You’re stumbling around, not knowing what you’re doing. You try to fit the pieces together but you can’t make sense of any of it.

A budget is you telling your money what to do. It’s your plan for how you’re going to spend, save or invest your money. When you create a budget, you’re spending money on paper before you do it in real life. You’re planning how you’re going to put the pieces of the puzzle together. And that’s powerful stuff when you’re chasing financial freedom.

I have no debts but I make budgeting a priority. Because, like you, I spend a lot of time and energy earning my income. I want to decide what to do with it based on what I want for my life. Don’t let budgeting myths hold you back from chasing the financial freedom you’re looking for!

Budgeting isn’t for me, because I make an irregular income

This is a pretty common budgeting myth. If you make an irregular income (for example, commissions and tips), you can still create a budget. I can understand how it may be more difficult, but it’s not impossible. You just need to approach it a bit differently.

Regardless of how you earn your income, I always recommend taking the most conservative approach possible. Budget only for the minimum income you’re guaranteed to receive. For example, if you’re paid an hourly wage, you should only budget for the minimum number of hours you’re guaranteed to work and earn an income.

Yes, that means your budgeted income will fluctuate from month to month. But that’s why it’s so important to be conservative. You can adjust your budget to ensure all your expenses are covered by your lowest paycheque.

I would also recommend setting a “salary” for yourself based on your essential living expenses. Only keep enough of your paycheque to cover your essential living expenses. Save the rest of your income in a separate account as an income fund. That money can only be used if you earn less than you budgeted for, or less than you need to cover your essential living expenses. This way, you smooth out those fluctuations.

Being on a budget means I can’t do anything fun

Another budgeting myth is that you can’t have any fun on a budget. There are plenty of ways to have fun without recklessly spending all your money! Being on a budget doesn’t mean you can’t have any fun. It just means the money you spend on fun is planned and aligns with your financial goals.

Planned fun might not sound like fun to you. But spontaneous fun is what can get you into financial trouble. When money is limited, you’re forced to make better decisions about where you spend your money. It forces you to consider whether each purchase is worth it based on what you want for your life.

Unbudgeted fun spending is an impulse purchase, which means you aren’t making a well informed financial decision. Impulse purchases are more likely to trigger remorse and guilt. That’s because they’re less likely to align with your goals.

You can avoid this by making a plan for how much you’re going to spend on fun and when. I allocate money for fun spending and shopping in each of my paycheque budgets. This way, I can plan to splurge in the future without being impulsive.

I pay my bills on time, so I don’t need a budget

Budgeting is so much more than paying your bills on time. It also involves:

  • controlling your variable spending (for example, groceries, shopping and eating out);
  • paying off your debts and becoming debt-free;
  • saving for large expenses (for example, travelling and holidays);
  • investing money for your financially free future (for example, retirement and wealth building).

I budget for fixed expenses, variable expenses and savings. Bills are fixed expenses. They’re a contract to pay a certain amount at a certain time. Managing to pay them on time is probably the easiest part about budgeting, but misses the big picture.

When you’re told how much and when to pay, you aren’t in control of your money. This is especially the case for bills like your rent. You have no choice but to incur those expenses.

What you’re missing, however, is control over your variable expenses. These are expenses that fluctuate and are heavily influenced by your decisions. These are things like grocery costs, eating out, fun spending and entertainment.

Your variable expenses can be controlled by your choices. Without a budget, you can’t see the financial consequences of your choices. As a result, you can’t learn to make better choices – ones that align with your financial goals.

Budgeting is boring and I don’t have time

I saved the toughest love for the end! I consider this to be a very pretentious and somewhat entitled excuse. And it’s one of the biggest and most dangerous budgeting myths out there. People think budgets are boring because they’re looking for a ‘get rich quick’ scheme. But that’s not what budgets are, so they can’t be bothered putting in the work.

Your money deserves your respect

If that’s how you feel, then you aren’t showing your money the respect it deserves. Your budget should be a priority. Your money deserves your respect. It’s the difference between having a roof over your head and sleeping on the street. Make it a priority and find the time.

My father grew up poor, so from a very young age, he instilled in me the value of money. I’ve learned to respect my money because it isn’t guaranteed. Without my money, I don’t have a place to live or food to eat. I can’t buy the medicine I need to manage my chronic heart condition, let alone reach any financial goals.

Besides, it doesn’t need to be boring. When I dedicate time and effort to my budget, it becomes somewhat addictive, especially when I starting gaining some momentum. I’d also suggest using your budget to get creative. Use coloured pens, highlighters and stickers. Here are 7 must-have items to make budgeting fun and easy.


There’s a lot of misinformation about the power and purpose of budgeting out there. Hopefully, I’ve debunked some of those budgeting myths for you. Everything changes once you realise your budget is the foundation on which lasting financial freedom is built.

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