Here’s a hot tip for when you’re at your next braai: the quickest way to kill any good vibe is to bring up budgeting.
Yip, boring old budgeting is probably the most talked about thing in financial media, and the most reviled by its readers. No one likes being told what to do, especially when it comes to what to do with your hard-earned cash.
Instead of telling you what to do, we’re just going to tell you about the 5 biggest budgeting mistakes other people make. A cautionary tale, a bit like the Tinder Swindler.
Let’s take a look at the 5 biggest budgeting mistakes you can make.
1.Keep your pants on outside!
Why on earth would you want to spend a bunch of time working out how much money is coming in, how much money is going out, and what you’re spending your money on? Sounds awful. We all know how much our salaries are, that’s good enough!
Well, if you’re earning more money than sense, it MIGHT be enough. But the biggest, most common personal budgeting mistake ever made is believing you don’t need a budget.
Boring old budgeting is one of the most talked about things for a reason, and choosing not to do a basic budget is a bit like going out the house without your pants on: it feels pretty damn liberating but it’s probably going to get you in serious trouble pretty soon.
2. Math is hard!
Another common mistake in budgeting is being careless with your calculations. Math is a precise thing, but most of us take the approach of rounding down or leaving out certain things along the way, to suit the narrative a little better.
Things always look better with a round number, right?
Wrong. Budgeting is math with a worse name, so it needs to be precise. Dropping a few rands here, there, and everywhere will ultimately land you in hot water when it comes to the end of the month.
3. Flashing the cash (or credit these days!)
We’ve all seen that guy in the club, dressed up and acting like he owns the place. Round after round, bottle after bottle, and at the end he swipes his black credit card.
Flashing the cash can often leave even the most diligent budgeter in trouble. One thing leads to another, and you’re living a lifestyle you simply cannot afford.
Instagram and other social media has made this kind of lifestyle desirable, but falling into this common budgeting mistake can leave you in big trouble.
The most important thing to remember when you see someone else living that kind of life is that every time you get into debt you’re taking money from your future self. Protect your future self and stick to the budget!
4. Testing the limit
One of the most common personal budgeting mistakes is one we probably all apply to many aspects of your lives. Just think about the last New Year’s Resolution you set: did you accomplish it? Did you stick with it for the year?
Probably not. The reason is most of us set goals or limits that are simply too big or difficult to achieve. Budgeting works the same, and it can be a major mistake not giving yourself enough wiggle room to achieve your monthly targets.
5. Savings are Spendings
We all love new things right? There’s nothing better than buying a new toy or item of clothing, and feeling that little dopamine rush as we open the package. It’s like your birthday, but every day!
But what if you’re a little short on cash the following month? The new toy doesn’t look so good then.. does it?
A major budgeting mistake most of us make is looking at our bank balance towards the end of the month, seeing a bit of extra cash and then immediately jumping onto Takealot to spend it. Savings are your “Get Out of Jail Free” card and should be something we all aim for.
Next time you see a little extra cash, think about stashing it in a different account so you don’t feel the need to spend it.
