SIX REASONS WHY BUDGETING IS KILLING YOU. AND THE MUCH SUPERIOR ALTERNATIVE

What is budgeting?

Well it's the first thing that comes up when you google "how to save money". Budgeting, generally defined as the strategic allocation of income during specific time period — is considered to be a reliable method of financial planning

But it's not. I'm sure we all had a budget once, and then gave up on it almost immediately. While It certainly does a marvelous job of keeping those impulses at bay, it can also be quite suffocating.

Yep, budgeting has some alarming negatives that make you wonder why people put up with it. Whether it's the anxieties of asking people to split costs, wondering if buying gifts for a loved one will leave a dent, or in extreme cases — agonizing over the morning latte.

The downsides to budgeting are nearly endless, but we managed to compile the four most noteworthy pain points. Plus an expert opinion from one of the financial industry's leaders.

1. It's a Logistical Nightmare

A common rule of budgeting is to allocate income into three distinct categories, needs 50%, wants 30%, and savings 20%. A method popularized by US Senator Elizabeth Warren

Sounds pretty simple right? However, in practice, this theory has some glaring issues.

What if you live in an expensive neighborhood and your rent exceeds 50%? or if you're the typical college student where 90% goes to basic necessities and education?

The 50/30/20 rule can fail those who are doing relatively fine as well. Let's say you make six figures or earning $10.000 a month, you are ordered to put a meager $2.000 on your savings account, and lavishly indulge in $3.000.

Igor Mitic, a financial consultant and co-founder of Fortunely had this to say…

"It doesn’t work for low-income and high-income [earners], It is hardly expectable that someone who brings home $1,000 after taxes can cover all the essential needs at $500. It is also hardly advisable that someone with a super-high income should spend 50% of what they earn [on essentials] simply because they can.”

He also added that your age, financial goals, relationship status, and whether you're employed or not, are all factors which budgeting doesn't proficiently juggle.

Building your entire financial framework on a book made 15 years ago, is an odd choice to put it mildly. How do you even excuse the higher tax rate since then?

2. Budgeting Might lead to some scary outcomes

70% of Americans are in depth and all of them have their own economic stress. A poor financial plan or structure will only exasperate these anxieties, and might even lead to depression or chrometophobia

3. Boring and Exhausting

There's the tedious tasks of compiling lists of all your monthly expenses on spreadsheets, constantly checking bank and credit-card statements, configuring and updating your budget categories etc.

This rigid process and decision making can become a painstaking chore, and is no doubt mentally draining and time consuming for some.

If only we had a way to effortlessly do that with a few clicks, or maybe even automated, some kinda personal accountant perhaps?

4. Developing toxic ideas

Think about it, budgeting tells you to sacrifice your worldly enjoyments, cut corners, pinch pennies and make major lifestyle changes. Spending money isn't an act of pleasure anymore, instead, you hardwire your brain into thinking every cent is a valuable asset, and everytime it gets out of your pocket = wasting resources.

This newfound attitude towards cash, creates the scarcity-mindset, where you convince yourself that there's only a finite amount of pie in the world, and you must firmly grip on what you have. However, this is a flawed and destructive worldview, and will only lead to more misery.

But we don't blame you. It's hard to focus on growth when you're budgeting, since it's about conserving instead of obtaining. You need a financial plan that's centered on the abundance mentality.

5. Budgeting gets wrecked by inflation

Every year, your dollar becomes less and less meaningful. The number of goods and housing you're financially locked from increases, while your clunky budgeting system becomes more outdated.

In this turbulent economy, Someone with poor financing will get obliterated. The cost of bread and gas keep shifting every year, things are not staying still, but your paycheck is.

Surviving in the storm requires you to not only be very knowledgeable and efficient with your money, but to also think 10 steps ahead, sounds like a lot of work right? Luckily, modern technology can do all of that easily.

6. Not life-proof

All it takes is one significant event, a sudden unemployment, a car accident, divorce, pandemic, aliens, and your whole life can spiral out of control. Most of the time. saving just 20% or less of your income isn't enough to prepare you for those major disruptions in life.

You have to save more — but how? Wouldn't that mean sacrificing enjoyment?

No, You can keep your enjoyments. There is hope.

The Solution

Money problems do not always come from income, but rather from unnecessary spending. Budgeting might fix that, but can also create more issues and in the long run.

Being mindful, and aware of how much you spend is the perfect 'sweet spot' between budgeting and enjoying life, it's also tied to the abundance mentality we talked about earlier. So why aren't more people doing this? It's because they don't know their limits. Keeping track of what's okay/not okay to spend money on is almost impossible. Especially in this day and age.

But thanks to modern-day fintech, you can relish in that sweet spot, and be able to see exactly how much you spend, how much you can save, loan payments, monthly expenses, and so much more, in an instant, with zero hassle.

You'll have a 100% secure digital accountants that not only eliminates the problems that budgeting brings. but is perfectly tailored to you and only you, no matter your income. It doesn't get any better than Fintech.