I came across this article on Personal Financial Myths. And one of the myths is “Budgeting is the best way to save money”.
the essence of it is that people will keep to their budget
The article quoted Jeff Larson, the study’s co-author and an assistant professor of marketing at Brigham Young, stating that when consumers set a budget for a specific item, they oftentimes limit their searches to items priced close to the budget’s upper limit.
For example, if given $1,000 for a flat-screen TV, for instance, consumers are likely to limit their selection to televisions priced between $800 and $1,000 before looking at each TV’s features. The more effective way would be to base your shopping on specific features and qualities.
In my opinion, budgeting is still crucial. Especially for those who are likely to be swayed by marketing gimmicks and end up buying a TV with 100001 features which they do not need or even know how to operate.
General budgeting also involves knowing where your money is being spent on – this means that it helps you put things into perspective, to know what exactly are you spending money on. Sometimes, you may be surprised by
CFP, representing Financial Alliance 