5 budgeting myths Canada

5 Budgeting Myths Debunked

Budgeting myths hold us back

All right friends, it’s myth-slaying time. Budgeting gets a bad rap, and I am here to change your mind about budgeting! 

I’ve seen too many toxic budgeting myths, ones that all beginners must break away from in order to truly master your money. Because as with anything you do, it is your mindset that will set you up for success. 

“Budgeting is not just for people who do not have enough money. It is for everyone who wants to ensure that their money is enough.”
2024 TFSA Contribution Limits
Rosette Mugidde Wamambe
Co-Founder - The Africa Women Leadership Summit

Time to get straight with budgeting

Let’s dive in to discuss the top 5 budgeting myths that are holding you back!

Budgeting Myth #1: You Have To Budget Monthly

This is sooo not true. In fact, it burns me up every time I hear it. 

The reason it persists is that it is an easy solution most people try to apply as a one size fits all band-aid. Your money situation is personal, and you should approach it in a way that works for you. A monthly approach might not be the best way. Perhaps you are paid bi-weekly and prefer to use the budget by paycheck method instead of trying to make a monthly budget work. 

I have experienced different pay period’s at a few jobs: Monthly, Bi-weekly, and I have tried out numerous approaches to budgeting. Monthly is not the only way, nor even the most effective way for most people. 

Alternatively, you can also budget with more than 1 method at a time. EG. Having a monthly budget, while also creating smaller paycheck or mini budgets. 

People still believe this myth because its the simplest soundbite that can be repeated about budgets at the most basic level

So don’t let anyone tell you that you have to budget a certain way, you do you!

The truth:

You’re going to have to try a few different methods of budgeting and decide which one(s) work best for you. Budgeting by Month might be the way for you, but don’t get discouraged if its not the right fit. There are plenty of other ways to try!

Budgeting Myth #2: Budgets Suck The Fun Out Of Life

This budgeting myth may be surprising. If you have ever put yourself on a budget, you probably felt like you couldn’t do anything fun. 

However, having a budget can actually help you enjoy life more!

How is that possible? A budget is simply a plan for your money. So when you make your plan, ensure you are prioritizing those things that bring you joy! 

Why do people still believe this myth? Most people confuse having a budget with going through financial hardship. 

This is not necessarily true.  We need to change our mindset of  being “on a budget” to the financial version of being on a health and fitness journey.   When you think about a budget as something you have or do, rather than something you are on, your mindset starts to shift. 

The truth:

Budgets can help you prioritize the things you love by putting your money focus on those items that are bringing you joy and helping you live the life you want!

Budgeting Myths

Budgeting Myth #3: Budgets Don’t Work

I can totally understand why someone would believe this budgeting myth, especially if you have never really committed to working on your budget consistently. 

A budget is not a Band-Aid, its more like Physical Therapy! It takes time and commitment to really make it work.

I’ve been there myself, and I can tell you that without putting in a bit of consistency and effort on your end, a budget will not be able to work its magic. 

It can be tempting to want to believe that budgeting doesn’t work, when in fact  the hard truth is it is you who hasn’t done the work to MAKE it work!

This dangerous misconception can doom people to give up prematurely on budgeting, throwing in the towel before they have seen the fruits of their efforts come to fruition. 

The truth:

Be prepared to put in regular time to monitor and update your budget. Consider tracking expenses – it takes some time, but it really is an eye opener and the magic sauce that makes budgets successful!

Budgeting Myth #4: Budgeting Is Restrictive

I can totally understand why someone would believe this, especially if they have only tried a budget when they were in a difficult financial situation.

I’ve been there myself, and I can tell you that just like most diets – this restrictive style of budgeting can only be maintained for so long.

A budget is often seen as a last resort to make what little money you have stretch to that next paycheck. And it can work – but it is not a sustainable long term approach to be extremely restrictive in your budget.

This is an extremely dangerous budgeting myth because it can lead you to not utilize a budget in an empowering way which can really limit your ability to reach your goals, focus your money priorities and spend on things that bring you joy!

It is important to put the focus of your budget on the things that are most important to you!

The truth:

I hate to break it to you, but the only person making your budget restrictive is YOU! You create the budget you need for your current moment. So give yourself some grace, and if money is tight, look for ways to increase your income and attack things from the other side as well!

paying yourself first

Budgeting Myth #5: You have to use cash to budget

This is the budgeting myth that irks me the most.  You definitely DO NOT need to use cash to budget.  In fact I am almost exclusively a digital spender who never uses cash. Yet I still have been able to use different kinds of budgets, paper based and spreadsheets to budget effectively.

One of the common and popular styles of budgeting is the Cash Envelope Budget and envelope stuffing.  That requires you to take out all your spending money in cash and allocate it to individual envelopes for certain expenses. Once you spend what is in that envelope, you can’t spend any more in that category.

Over the past decade, spending habits have changed, and more and more people are relying on digital money instead of cash. Because of this, there has been an adaptation of this model to digital apps, and other budgeting tools to utilize the envelope style for digital spenders.

This is a severely limiting belief  when it comes to budgeting, as budgeters may feel they need to use a method they are not comfortable with (cash vs digital) and try and make a style fit them that they are not comfortable with.

The truth:

Use the style that is most comfortable for you. Not a regular cash user? Don’t force yourself to use cash to budget. Keep using your preferred style of spending, whatever your preference is. There is a budget that will work for your preferred style!

Why is it misleading to believe these 5 Budgeting myths?

Believing in these budgeting myths can make you question your decision to improve your finances through budgeting and limit your success.

And I absolutely know you have everything it takes to master your money. You need the right guidance to succeed in budgeting. Otherwise, you risk losing time, missing your goals, and not getting your money right. 

Whatever you do, don’t give up! 

I’ve seen dozens of our community members succeed with their budgeting goals. There’s nothing mysterious or special about them. 

They did it by utilizing our budgeting tools and putting in the work!

I created this worksheet to help you make a plan to set and reach financial goals for yourself! 

Download our free Financial Goal Planner Sheet so you can get started.

More from the blog

About The Author

Leave a Comment

Your email address will not be published. Required fields are marked *