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15 Budgeting Myths That Are Holding You Back

Education 5 min read

28 Sep 2020

Kel Galavan, otherwise known as Mrs Smart Money, is a budgeting coach. In this article, Kel busts some common budgeting myths and provides some tips that might help you get a firmer grasp on your finances

Facing into our strange new Covid world, starting a budget might be the last thing on your mind. However, in this time of uncertainty, having a budget could be the exact thing that you need to get you through.

If you are like most Irish people, you might have made a few attempts and given up within days or weeks. This may be because of the bad reputation budgets have garnered over the years. However, I can assure you that this is not the case. A budget is more than crunching numbers and itemizing expenses. A budget is a powerful tool that will help you find where your money is going and channel it to things that make life better, one month at a time. It will help you get your money to work as hard for you as you do for it. I know this because my budget was one of the biggest factors that help me to cut out out goings by over €27k during my No Spend Year and it is still saving me money today.

I want to dispel some of the negativity around budgets and help you to get into a positive life-changing teamwork mindset with your money. To do this I am going to squash many of the most common budgeting myths for the bunkum that they are and set you on a journey where your money brings you freedom and choice.

Here are the most common budgeting myths that are holding you back:


Myth 1: Budgeting Is Time Consuming

This is one that I have heard so many times. The misconception that budgeting is a time-consuming task is a red herring. True, it can take a little time initially. Although, that time has been shortened with the advent of budgeting apps which often only take a few minutes to set up.

Taking that few minutes to set up your budget will probably have a higher financial impact than anything else you do this week, including your job. The small amount of time taken in the beginning is worth it, and maintaining is easy once a routine has been developed.

Starting a budget could be some of the most valuable minutes you ever spend.


Myth 2: Making a Budget Is Too Much Effort

Once a budget is up and running, it is easy to automate the majority of it. Set up direct debits each week or month to pay bills, loans and savings. Once these are automated, you have little effort to put into it and are free to focus on the fun things in life. We all want to focus our energy on that. 

Just start and see for yourself how little effort a budget can be.


Myth 3: Making a Budget Is Complicated

A budget is only as complicated as you want to make it. At its very core, a budget simply is your income minus your outgoings and savings equals zero. That's it!

Except for the few uber-nerds out there, having a spreadsheet with 20 different categories probably won't work for you. The vast majority of us want to live our lives and not agonize over whether a muffin should be categorized as eating out or entertainment. It doesn't matter as long as you are consistent in where it goes.

Include as many categories as you are comfortable with, in your budget. It can be as few as 3 or 4 or as many 30. The only rule here is that you include all your expenses under some category. Remember, the itemization that your friend uses may not work for you. Personalize it to your comfort level. It's your budget for your money to make it work for your situation.

You control how complicated your budget is, it is your budget after all.


Myth 4: Budgets Are for Math Brains

Budgets have practically zero to do with math. It has everything to do with thinking clearly and planning a little. For the tiny bit of addition and subtraction that is required, budget tools do all that math for you. Leaving you to focus on paying down that debt, building your future and living your life.

If you can count, you can budget.


Myth 5: I Don't Know How to Start a Budget

Let's be honest here, most of us aren't that creative, and the thought of designing a big template with multiple filters and massive detail is enough to make even the bravest of us run and hide.

The hardest part of budgeting is sitting down on the first day and starting. A budget does not have to be complicated or detailed. It just has to record all the money coming in and going out accurately. How you choose to make that look for your lifestyle is up to you.


Just start simple and tweak as you go until you have created what works for you.


Myth 6: Unexpected Expenses Blow My Budget All the Time, so Why Bother?

If you feel like budgeting seems pointless, you're probably doing it wrong. Life has an interesting quirk of throwing unexpected things our way all of the time. Which, when you think about it, should make them expected. If you do find that you are dealing with unexpected expenses on an excessive basis, you may be doing one of two things (or both) wrong.

First, ensure that you are recording all your expenses. When starting a budget, make sure that you note all of your outgoings every single month. This is vital to the success of any budget. Thinking an item as inconsequential gives no reason not to record it. But all the small expenses add up to make significant deficits in budgets which will ultimately lead to failure.

Secondly, look for patterns. Before throwing in the towel on your new budget, track all of the 'unexpected expenses' and check for consistencies. Is there a habit of impulse nights out or your car needing work? Is your apartment old and regular maintenance is required? These in truth are not unexpected expenses, these are expenses that are part of your life and as such, can be quickly built into any budget. It may turn out that a more cost-effective thing is to change your car or move apartment. Unless you track your expenses, you may never see that and continue leaking your hard-earned cash unnecessarily.

The main point here is to track all expenses, identify and build your budget to accommodate those expenses with the view to ultimately curbing them to a manageable level.


Myth 7: Budgeting Is Boring

This is one of my favourite myths to bin. After the initial phase of setting up your budget is completed, and you have got the hang of tracking your expenses, you might surprise yourself with how much fun you can have.

Once you have a grip on your money, you can begin to channel it to the areas that it needs to go. Watching debt levels drops while savings grow can be quite an exciting experience. It brings a tremendous sense of empowerment and sets you up for reaching even greater goals in the future. Another proof of how un-boring budgeting is this, you may find yourself spending less time stressing over credit card statements, loan interest rates and worrying if there is enough money in your account to pay the bills. Budgeting is key to helping you get out of debt.

Being debt-free means having freedom and choice. Now that's the opposite of boring.


Myth 8: I Can Do a Budget in My Head

I am happy to challenge anyone on this. Unless you are a number savant, I would seriously doubt if you can do a full zero-sum budget for the entire year off the top of your head and be accurate.

A mental budget is a lazy way of evading your fiscal duty and cheating your future self out of a decent lifestyle longterm. When you sit down and work out your numbers in black and white, you can begin to see the many small changes and tweaks that can be made to change the tide on debt and savings.


A budget is not just about this month's money, it is about planning over time so you can work out exactly how and when you will reach your goals.


It also gives the bonus of recording your fantastic progress as you go and that feels good.


Myth 9: I Save Money Every Month, so I Don't Need to Budget

Spending less than you earn is critical to building wealth. So, if you are one of the clever people who are already living below their means, congratulations to you! Only 40% of Irish people can say that. (www.cso.ie)

However, if you are living below your means and don't have a budget, then you are cheating yourself. A budget is a tool to help you pinpoint what money you have coming in and where your money is going to. It allows you to see how much you are saving and what you are saving for.

Are you on track for retirement? Maybe a big holiday? Or is your rainy-day fund shored up? Understanding these types of savings and measuring the current progress will help prioritize where to send your savings and how much more you need to reach them. It also allows you to identify wasted money and channel that towards saving and doubling down on your already good work.

Supercharge your savings with a budget.


Myth 10: I Track My Expenses, so I Don't Need a Budget

Tracking your spending is only the first step to getting your money in order. When you only track spending, you're always looking at the past and never looking forward.

Your budget is your game plan for the upcoming week, month or year. A budget helps you figure out how much you need to save to reach your goals and how you're going to keep it and where to find the money to do that.

A budget is a perfect bridge between planning for your future spending while looking at your past spending, not just one or the other.

If you're already tracking your spending, the budget is just a natural next step. Take it.


Myth 11: A Budget Is Too Restrictive

This is another one of the biggest budget myths, the false thinking that a budget equals deprivation. This is not the case. It is crucial to keep certain fun spontaneous things in your life, the Saturday morning coffee and nights out with friends are normal parts of living. Just build it into your budget. Having a budget doesn't mean you can't have fun anymore. It means that you can have fun things and still protect the future you. It increases your chances of being able to have that flexibility of fun money for the rest of your life.

Believe it or not, a budget gives you the freedom to spend your money, guilt-free!


Myth 12: It Not the Right Time for Me

If you find yourself putting off making a budget, ask yourself this: why am I putting it off? Is it because money is tight? Is it because the credit card is maxed out? Is it because you are working two jobs to make ends meet? All of these are vital signs that you need to start a budget. The time is never right. Something will always come up, that's life.

Put your big person pants on and get your money working for you so that you don't have to worry about these things any more.


Myth 13: I Don't Have Enough Money to Budget

Many people assume budgeting is for people with good incomes. The truth is, if you don't have much money to begin with, budgeting is even more critical. A budget is a way to maximize the efficiency of your income.

Without a budget, you have no plan, and with no plan, how do you expect to get yourself away from being broke and onto a better path.

Let your budget help you find your money.


By failing to prepare, you are preparing to fail. -Benjamin Franklin


Myth 14: Budgets Have to Be Detailed Down to Every Last Cent

Another big misconception around budgeting is that it has to be itemized to the nth degree. This is not true. The best budgets are the ones that are flexible and have relatively few categories.

The key to a budget is the saving element. This ensures that you are moving forward (no matter how slowly) with building your net worth while also preventing overspending, which could set you back.


Simple is always best.


Myth 15: I'm Debt Free, I Don't Need a Budget

If you are in this lucky category, well good on you! But that does not spare you from needing a budget. While a budget is beneficial to become debt-free, it will help to keep you debt-free too.

Life is long, and there will be many things that you will want to see, do, experience, have and build. A budget will guide you in saving for those things. It will help to lessen the chances of needing to draw down debt in the future. Having the freedom of being able to pay for something in cash opens up a whole new world of choice.


Use your budget to stay debt-free.



Tracking past spending and setting out future goals are two of the key features in any budget. However, it is the skill of balancing these two aspects that brings the magic to a budget and increases the chances of a secure financial life and sleeping like a baby at night.


Creating a budget helps you to deal with life's unexpected twists and turns. It allows you to understand where you are and maps out the path to a healthy financial future. Regardless of your situation, if you hope to grow or maintain your wealth, you need knowledge on your side. No one ever got rich by squandering money, and you can't know how best to manage your money without knowing the facts.


A budget is not a millstone of restriction and denial. It is a powerful tool that can help you bring you freedom. Freedom from debt, freedom to choose, and freedom to live the life you want.


Now that I have busted those misguided budget myths, I challenge you to take control of your financial future and embrace the superpower of budgeting.


Kel Galavan, otherwise known as Mrs Smart Money, is a budgeting coach. Kel stepped back from her 16-year career, because she felt that her childrens’ childhood was passing her by and she felt wasn't around to
see it. She knew there has to be another way to get a balance in life.

So she embarked on a mission to make the remaining income work as hard as it could. This resulted in the No Spend Year coming into being, in which she succeeded in reducing her family's outgoings by €27,500
through mindful spending and minimalism. The book on her journey will be released soon through Orpen Press. You can find her on Instagram @mrssmartmoneyhq and at 

Money on your Mind is a new series which aims to help you build your financial confidence. You’ll find insights, tips and suggestion to help you feel more knowledgeable about managing your money, as well as jargon free answers to some basic financial questions. Disclaimer: This article is an opinion of the writer and is for information purposes only. It is not intended to be investment or financial advice.