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8 Budgeting Myths You Need to Ignore

To create a budget and do it correctly, we need to have a full understanding of what a budget is, how it’s used and what it’s meant to accomplish. Yet, many people get false information about budgeting. There’s the poor guidance we get from friends and family and, worst of all, the lies we tell ourselves.

To dispel rumors and set you on the path to financial success, we’re tearing down eight of the most common myths we hear about budgeting.

8 Myths About Budgeting

  1. A budget is limiting.

    Many people know they should create a budget, but they put it off because they believe it’s too restricting. They worry that they won’t be able to spend any money or have any fun. This is simply untrue.

    A budget gives you the permission to spend money. At the beginning of the month you determine how you want to spend your money, and you do it rationally — unlike spur-of-the-moment splurge purchases you may be used to making.

    Now, when you want to spend money, you can do it stress free. You know that you budgeted $150 for going out to eat and you have $50 left. You don’t need to feel guilty about spending money, and you don’t need to stress out about the expense. Reducing ambiguity reduces stress — spend your money knowing that it won’t stand in the way of you and your financial goals.


  2. You have to be an accounting expert to create a budget.    

    We have good news: You don’t need to be a numbers whiz, you don’t need to know calculus, and you don’t even need to know how to use a spreadsheet.

    A budget is actually quite simple. It’s adding up the money you bring in, deciding where you will spend it that month, writing it down and tracking your spending. That’s it!

    As we explain in our comprehensive guide for creating a monthly budget — which goes into far more detail — there are tons of apps out there to help you with your budgeting. Even better, many of them are free! So you don’t need to bust out any special Excel formulas, just plug in your income and start managing your spend.

  3. You can’t create a budget with variable income.

    There’s a ton of reasons you could have a variable income. Maybe you’re a nurse who works hourly, or a sales manager who gets commission as part of your pay. Regardless, you’ve decided that variable income makes budgeting impossible.

    This is not the case, and the solution is simple: Find your absolute minimum income. This is the bare minimum you know you will make every month. Some months you may earn more, but you’ll never dip below this amount unless you become unemployed.

    Create your budget with this amount in mind, and have a contingency plan for when you make more. In months when you have a surplus, you can use it according to that plan, which could mean putting it toward debt, adding it to an emergency fund, or using it for any number of other goals.

  4. Creating a budget takes too much time.

    Starting a budget shouldn’t take more than half an hour, and updating it each month shouldn’t take more than 10 to 15 minutes.

    For your first month, you’ll need to establish your monthly post-tax income and the categories you want to have for expenses. However, in future months, it doesn’t take long to look at your budget and make slight adjustments. In some cases, you won’t need to make any changes to it at all.

  5. If I avoid a budget, I don’t have to deal with my money problems.

    This is partly true. If you avoid a budget your money problems will go away … until they come back, bigger and worse than before.

    Many people avoid setting a budget because they’re afraid of what they’ll find when they assess their debt and spending. This is a massive mistake — you can’t improve a problem until you face it. To eliminate money problems, you need a budget. It’s your best friend in the fight against debt and financial trouble; it’s a game plan for winning with money.

  6. I don’t need to write down my budget.

    A budget isn’t a budget unless it’s written down. Until then, it’s just a guess. If you still feel you can budget without putting it on paper, ask yourself: How much did I spend on groceries last month? How much did I spend on entertainment last month?

    We’re guessing you don’t know. Putting pen to paper and tracking your expenses ensures that you don’t overspend.      

  7. My spouse doesn’t need to help with the budget.    

    If you’re married and share your finances with your spouse, you’ll need to get their buy-in when it comes to budgeting. Couples regularly disagree on finances — so much so that finances are a leading cause of divorce.

    Anyone who truly wants to stick to a budget needs to work on the budget with their spouse. This shouldn’t be surprising; a budget is precise, so it’s unlikely that anyone could stick to a specific spending plan without agreeing to the details and understanding them.

  8. I make too much (or too little) money to need a budget.
  9. If you’re on the other end of the spectrum and you’re struggling to make ends meet, the last thing you need to do is spend without a plan. When people have barely enough money, they can quickly make the mistake of paying an upset debt collector before paying their electricity or buying food. A budget prevents your spending mistakes like this. When you plan your spending, you decide what’s important and ensure that your money goes toward priorities first.

Still need help budgeting? Get the scoop in our definitive guide to budgeting, where you’ll find all the tips you need to succeed.