One of the reasons so few people adequately plan for their financial futures is due to the proliferation of several common myths. Some believe that Social Security will provide everything they need for retirement (it won’t), or that their life insurance payout will take care of their families in an emergency (they often aren’t sufficient). And those are just some of the big ones! Smaller myths abound, especially regarding personal budgets, and we hope to shed some light on the truths regarding these beliefs.
“I don’t need a budget”. Everyone needs a budget, no matter how generous or meager their income. Even if you’re comfortable, nothing is ever guaranteed in life, and we should all possess the skill of tracking expenses. Plus, you could be overlooking opportunities to save money and prevent future problems, if you aren’t taking a hard look at your finances on a regular basis.
“Budgeting is too much hassle”. Yes, it can feel a bit overwhelming the first time you sort through bills and statements. But once you’ve pushed through the hard part, and you’re organized, budgeting will be fairly simple and automated from here on out. You can even utilize various types of software or smartphone apps to make the process easier. Commit to establishing a system now, and you’ll thank yourself later.
“I can track my budget in my head”. No one’s memory is perfect all of the time, and fees for missed payments or overdrafts can really add up. Keep written or digital records of your bills and spending, to avoid mistakes.
“Budgets equal deprivation”. For some reason, budgeting has become synonymous with deprivation. But it doesn’t have to be that way! Establishing a budget simply means that you have confronted your reality, decided what is important to you, and set goals for the future. When you’re living according to your true values, you won’t miss the little expenses that you decide to drop, and you’ll be thrilled to meet your goals in the future.
“Budgeting is for those who are saving for a big expense”. Even if this were true, retirement is a big expense, isn’t it? And we’re all saving for that! A budget will only help you identify dreams and make a plan to achieve them.
On that note, give us a call if you need help with your own financial planning. We can help you determine your retirement goals, set an approximate timeline, establish a budget and TSP contribution plan, and make other decisions to help safeguard your future.
