Misconceptions With Regard To Budgeting

Misconceptions With Regard To Budgeting

It is very much important for families and individuals to maintain budgets. There are many wonderful tools to manage the personal finances.  Budgeting is not only for those people who feel their income is quite low to meet the expenses but also for everyone. No matter whether you have the plentiful money or trying too hard to meet the ends meet, one should maintain a personal budget to benefit in future. There are many mistakes people make by having the wrong misconception.  Listed below are few misconceptions most of the people have which prevent them from tracking their finance and drawing out a budget.

The misconception to be avoided

My work and income are secure- It is quite hard to believe that none of the jobs are secure. It is always a possibility that you might be laid off because of downsizing or an acquisition.  Hence, one should be always prepared for a loss of job anytime and should have at least 3 months of living expenses saved in the bank.  It is easier to allocate the funds if you have a proper budget in place.

Also, one should always think of another source of income like taking part in the online trading of shares, currencies, cryptocurrencies, etc to have a secured life financially. One can easily trade in digital currencies using various automated trading software’s that are available in the market. You can read about it here to get a better understanding.

I’m not comfortable or good at math- You don’t need to be an expert in math to do budgeting. But there are many budgeting software’s available now which can assist you in this regard.  All you have to do is to simply follow the instructions given.  Most of these software’s are legitimate and free.

I want to live life luxuriously- Many people don’t want themselves to be deprived of things they like to splurge on. However, the aim of budgeting is to ensure that you could save little every month at least 10% of the income earned.  Tracking does not mean you don’t have money to spend, but it will show you where the money is getting spent.

I’m debt-free- It is good that one is debt-free, but in case of emergencies if you don’t have any saved money with you, a zero balance of fund can quickly change into a negative balance. Hence a safety net is required to act as a cushion in case of unforeseen events.