Top 6 novice budgeting mistakes: Part 2


In the previous part of this series, we talked about how setting an unrealistic budget and forgetting about yearly expenses can have a detrimental effect on your ability to maintain a budget. Here are four more common - yet easily fixable - mistakes novice budgeters are prone to make.

Making an exception just this once

As part of a good budget, you're meant to record every single purchase you make. This way, you can tamp down your spending appropriately afterwards, as well as review your purchases for when you next plan your budget.

However, at the risk of seeing the truth about where their spending is going, some people intentionally forget to note down those guilty pleasures. Avoid this, and instead embrace how it makes you feel - it'll help you evade such behaviour next time.

Losing your way

A sad fact of life is that human willpower is weak. It's easy to lose discipline and fail when it comes sticking with your budget.

However, another, more positive fact of life is that humans are characterised by their resilience and persistence. Instead of falling off the horse and staying down, you can dust it off and try again. You might even think about adjusting your budget to allow for some of those more irresistible temptations.

Looking over the fence

We're competitive animals, and to some extent it's natural that, when laying out a budget, we want to keep up with the Joneses. But remember that everybody's financial circumstances are different - there's no use making a budget tailored to emulating the spending of someone with a higher paying job.

Rather, every budget should be a unique snowflake that is specifically organised for your particular finances, needs and family situation.

Forgetting about surprises

Surprises are usually fun. There are some surprises, however, such as a sudden medical expense or an important house repair, that are less welcome - particularly to your finances.

Unfortunately, when planning a budget, many people only plan out the expenses they know about, and perhaps leave a little bit for savings here and there. They forget that they need an emergency fund for those known unknowns that can unexpectedly run amok on your budgeting. Don't be one of these people.