Budgeting Myths That You Need to Stop Believing In Order to Save for Your Down payment
When saving for a down payment, figuring out how to manage your finances is without a doubt the most crucial step in saving for your down payment.
This means budgeting you money and figuring out where in your life you can cut back and save money. Yes, I said it, budget. The much dreaded budget. For many, the entire concept of living on a budget can be exhausting and daunting, and putting one together can seem downright daunting. But the truth is that by creating a budget you will not only be able to pay off your debts and save for your down payment. Not only will you be able to focus your money on where it needs to go, but you will be able to take control of your financial future, as opposed to wondering where your paycheck went mere days after receiving it.
Just like with anything it is absolutely critical that you know and understand the difference between fact and fiction, and a budget is no different. If you google, “how to create a budget” not only will you end up with an overwhelming amount of information, but a lot of it won’t even be true. Here are some common budgeting myths that you, myself and everyone needs to stop believing – in order to save for your down payment.
1. Budgeting is Another Word for Depriving Yourself
This is perhaps the most well-known and most influential myth when it comes to turning people off of budgeting, however, it could not be further from the truth. A budget is meant to be a personal tool that helps you to prioritize your spending and actually reach your financial goals. Now, in order to reach those goals, you might have to sacrifice some of your shopping or restaurant budgets in the short term, but it is only to help you reach a goal that is more important to you than a new pair of jeans.
2. I Have Never Been Good With Math, So I Can’t Budget
While determining how much of your income is going to be designated to each area can take some time, the actual math part of it is quite simple – especially if you know what you make every month. Simply write out what you plan on spending in each category, add it all up and then subtract it from your income. If you end up in the negative you either need to a) find a way to make more money or b) adjust your variable expenses until your numbers equal 0.
3. You Can Absolutely Not Go Over Budget – Ever
Okay, let’s clear this myth up right away. Yes, you should aim to stay on or under budget, but the reality is that life happens, and no one is perfect. When you do end up going over budget – and everyone does at one point or another – the best thing that you can do is adjust your budget so that you are still staying within your means, and go from there. Unfortunately, for a lot of people, when they go over budget they tend to get defeated and give up on the entire budget. It does not have to be that dramatic. Just make sure that you are covering your fixed expenses – mortgage, debt repayment, savings, childcare, car payment…etc… and adjust your variable spending to stay within your means.