Budgeting: Common Misconceptions and Limiting Beliefs

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Why Weren’t We Taught This is School?


I remember filing my taxes years ago and a thought popped into my head, “Shouldn’t I have been taught this budgeting stuff in school?”

Since leaving education, I haven’t once used Pythagoras’s theorem (no offense to the dude). Yet each year, month, and day of my life I require skills that I have only obtained through trial and error (oh the errors). It dawned on me that the lack of useful and practical economics taught in schools was detrimental to us as adults. Think about the first time you found out what a credit score or checking account was. Our financial literacy isn’t something that we had the opportunity to develop.

This blog by no means is to pick apart the educational system, but rather reflect on what we were taught, how that leads to common misconceptions, and what we can do to improve our relationship with budgeting and money, and finally find financial freedom.

Traditional Economics Vs Behavioral Economics

The Problem with Traditional Economics

So, what were we taught in school? You may certainly remember learning about money in school. However, it likely just focused on numbers and the assumption that human beings are logical and will always make the rational decision. If you were taught about economics in school, budgeting might have sounded like a breeze. Like it would be easy to make heaps of money and be successful.

However, traditional economics is completely void of all the behavioral aspects of decision making. It frankly just isn’t that straightforward. It is no wonder we weren’t set up for success and most likely got the shock of our lives when we realized in adulthood that we hadn’t the faintest idea of what we were doing.

In my experience, money and budgeting are usually framed as a moral issue. That the decisions we make with money are either good or bad. This false narrative then starts to develop in our heads as we approach adulthood which evokes feelings of shame when less favorable decisions are made about money. Having money doesn’t mean you’re a good person and lacking it certainly doesn’t mean you’re bad. Your bank account figure doesn’t equate to your worth. Period. It is by no means the intention of the educational system to instill harmful beliefs. However, it cannot be denied that it may have contributed to the development of this misconception. 

While I tread lightly, I think it’s too meaningful not to mention that the system is designed for us to stay in debt. The reason I am pointing this out is only to provide you with comfort in knowing that there is a reason you’re struggling with finances and it’s not just you (by any means). There is no doubt that some businesses and government entities have been specifically designed to make money from your lack of success or debt. The less we know about how to take control of our finances and understand them, the harder it is for us to make the correct decisions. To sum up, it ain’t your fault.

How Does Behavioral Economics Differ?

Behavioral Economics takes into account emotional, cognitive, and physiological factors as well as how social and cultural factors influence the way we process and make decisions. Why shouldn’t we be taking into account how our minds naturally work to make decisions? Humans are pretty predictable, it turns out. However, we are also illogical. This is not something that should be shamed, blamed, or changed. 

We need to stop trying to change ourselves and finally accept who we are. We can  then rearrange our environment to support our natural state of being

Let’s face the facts, we were not designed to live in a world as evolved and complicated as this one. It is no wonder that we regularly feel inadequate and unequipped to deal with many things we’re faced with. Finances and budgeting is no exception to this. So, what do we do with this information?

We choose self-compassion and understanding as to how our brains work. There is so much power in knowledge. We can rewrite these limiting beliefs and pre-established misconceptions and change the way we approach and think about money. We spend a lot of time thinking about the past and worrying about the future. Where does this stress come from? Society, institutions, and even the people closest to us shape our beliefs that could either be false, damaging or both.

You aren’t your past “mistakes”. Financial freedom can look like letting go of the misconceptions that shaped our views about money. You can take the first step to choose another path, choose a life that honors who you are and what you want. You can choose you.

You deserve to be happy, fulfilled, and content. If you think your relationship with money could use some TLC, check out the ways that I can help empower you with your finances and budgeting. Click here for more helpful blog articles and visit this page to download your free bulletproof budget template.

I’m Sarah


On a mission to change the world of finance from stuffy suits and guilt-trips to a place of understanding supported by solid strategy; I have personally journeyed from homeless teen mom to ass-kicking CEO and now my work centers around empowering women like you to do the same.

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