Top 6 novice budgeting mistakes: Part 1

couple budgeting

If done right, budgeting shouldn't be easy. It should require some difficulty to organise your regular spending and figure out where you can trim the fat - otherwise, why did you need it in the first place?

However, factors of difficulty such as this are acceptable, because they happen to be the cost of doing business, in terms of successfully creating a spending and saving plan. Then there are the unacceptable factors of difficulty, which often come about due to mistakes.

In this two-part piece, we'll outline three of the most common mistakes novice budgeters make when they try and create and maintain a budget. By getting to know them, you might have an easier time avoiding them.

Being unrealistic

Not being realistic when making a budget can cut both ways. Some people make a budget that is far too extravagant and ambitious, believing they'll be able to reach incredibly impressive goals in record time.

By contrast, other people are far too harsh on themselves, imposing unnecessarily strict discipline on their spending. Doing this sets you up for failure, and only succeeds in making you unhappy. It's important to let yourself breathe a little with your budget - after all, a budget is ultimately about your future happiness.

Forgetting about yearly expenses

It's easy, when creating a budget, to simply plan things out month by month, or week to week and maintain this narrow, focused view all the way through.

Where people fall into difficulty is when they forget about those costs that aren't ongoing - a certificate of fitness, for example, or school fees. These have to be factored into the budgeting as much as regular expenses, and if they're not, they'll throw the whole project out of whack. That's why MOVO's Lifestyle Budgeting tool allows you to input costs like council rates, and car and pet registration.

In the next instalment, we'll outline four more novice budgeting mistakes you can avoid.