5 Budgeting Myths that Prevent People from Saving


May 6, 2024

Director of Family Budget Services Rob Bertman shares tips on creating an effective budget and how to stick to it.

Few people say they love budgeting. However, budgeting is a critical part of the financial planning process. You can have the perfect financial plan, but it won’t work unless you have enough money left over at the end of the month to fund your goals. Budgeting is the way to ensure that you have that extra money and stay on track.

So, what keeps people from creating an effective budget? Many find budgeting boring and time-consuming, or they think they don’t need to have one because of their income level. Budgeting can be especially difficult for couples who struggle to get on the same page. And many traditional budgeting techniques can actually create more obstacles to overcome.

The good news is that using different and more effective budgeting techniques can make the process simpler while also bringing couples closer together. Let’s dispel the top five budgeting myths that get in the way of our relationships and financial goals.

1. Budgeting is about giving up fun.

As a family budgeting professional, I often hear families say, “We know we need to budget, but we don’t want to give up our lifestyle.” This is common because people often start their budgeting process by making a list of things they need to give up, or worse yet, what they think they should give up.

Instead, I suggest you start by prioritizing the items you want to keep spending money on rather than what you want to cut. This technique makes it much easier to identify where to reduce expenses because you won’t feel like you’re sacrificing what you care about most.

2. You need to track everything.

Nothing makes budgeting harder than trying to categorize and track dozens of budget categories. The good news is that you don’t have to.

The only thing that truly matters is how much you spend each month. It doesn’t matter if you spent money going out to dinner, buying something on Amazon, or going to a concert. All that matters is that the money has been spent. Simplify your process to look at your total spending rather than getting caught up in tracking many budget categories.

3. We can’t budget because we don’t see eye to eye on spending.

This may seem like a huge barrier to budgeting, and it certainly can be. But budgeting can bring couples closer together if done in the right way.

Start by finding common ground. Pick just one financial goal you agree that you want to reach. It could be saving for an investment property, paying off credit card debt, or taking a nice vacation. Then, keep your conversation about the goal short. It shouldn’t go for more than five to 10 minutes. Set a timer and end the conversation once it goes off. You’re better off having a short, positive meeting than having a long, drawn-out one.

Finally, leave the judgement behind and appreciate each other’s perspective. Someone who is too structured may benefit from a little more spontaneity. Someone who is spontaneous might do better with a little more structure. Use your differences to your advantage.

4. It takes a lot of time to keep up with a budget.

We’re all busy, and the last thing we want to do after a long day of work and family logistics is to have a budget conversation. To keep your time spent on budgeting short and sweet, I suggest having a “five-minute weekly spending review.”

Use this time to accomplish three activities: Scan your transactions over the last week, look at your total spending month to date, and select two or three budget categories that you want to review. This will give you four opportunities each month to check in and make sure you’re on track for the month, and it helps keep the meetings structured.

5. We earn a good living, so we don’t need to budget.

I admit that I believed for a long time that people who make “enough” money don’t need a budget, but that is far from the truth. I’ve worked with couples earning six-figure and sometimes seven-figure incomes who never thought they would need to budget. Then, as they moved into their 40s and 50s, they started to feel behind on their goals. I often heard them say, “I’m not sure how we got here.”

Instead of waiting until that point, budgeting along the way will help you stay on track and even get ahead faster. I suggest using the 50/50 rule as your income grows. As you get raises, promotions and bonuses, take at least half of that increase and add it to what you’re putting toward your financial goals. You’ll not only increase your savings, but you’ll increase your savings rate, which is key to reaching financial success.

Who can help with budgeting?

Budgeting is key to reaching your financial goals, but these five myths might be getting in the way of you starting to budget and sticking to it. Remember to start with the things you want to keep spending money on before getting to the things you want to cut, focus on total spending rather than dozens of budget categories, use your different perspectives to your advantage, keep it short, and just get started!

If you’re looking for a team that has the budgeting tools to help you be successful, ask how your financial advisory team can help. Your team can help you figure out how to overcome your biggest challenges and add a layer of accountability to make sure you stick to it.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third-party data and may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. R-24-7139