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The Biggest Budgeting Mistakes You Can Make

BUDGETING The Biggest Budgeting Mistakes You Can Make

There are only a few of us who try budgeting these days. If you want to save money, plan for the future or simply know how your money disappears by the 15th of each month then budgeting is the thing for you. However, there are a few common mistakes that crop up when setting out and planning a budget…


Rounding Down and Leaving Out

Budgeting only works if you know how much you’re spending. The thing most of us like to do is round down those annoying cents or Rands – whole numbers are just easier to deal with! The problem comes in when we don’t stop at those little amounts. A lost R20 to R30 here and there soon becomes hundreds.


Keep track of every cent possible – and if you like rounding off, then always round up. That way you won’t ever underestimate how much money you spend each month.

Keeping Up With The Kardashians

OK, maybe not the actual Kardashians but more along the lines of living beyond your means. It’s very easy to get caught up spending on a night out with friends or buying that expensive pair of boots. Suddenly the credit card is out and we’re spending money we don’t actually have.


When you sit down and make a budget, you need to be honest with yourself and set some limits. Yes, there will always be times were you slip up but the thing to remember is each time you use credit you are actually taking money from your future.


Money that you haven’t earned yet and putting greater strain on your future financial health.

Zero Wiggle Room

Keeping to a budget is hard. Really hard. Keep this in mind when setting yours and try to keep it user friendly. If you set too tough limits, you will always be discouraged when you don’t make them. That discouragement can easily lead to giving up on budgeting altogether and creating greater problems in the future.


Leave some wiggle room in your budget for unforeseen expenses or fluctuating costs. This extra money isn’t an excuse to spend more – in fact you don’t spend it, set it aside in a Tax Free Savings Account or some other form of investment.


This way you not only save money but its money you had written off already – almost a double save.

Save For A Rainy Day

Along with a little wiggle room you should also be including savings into your budget. South Africa has a terrible culture of not saving money and it’s starting to show. Our credit-based way of life has left so few of us with actual savings that it is impacting negatively on our ability to provide for ourselves after we retire.


Building in some form of savings into your budget each month – whether you choose to start a separate savings account for this money or simply add it to your monthly RA payments, it’s always a good idea to save more.

Be Realistic

This is a point that covers a large deal of how we spend and save our money. It reflects in how much we often set aside too little for emergencies, or spend too much thinking we can continue relying on credit. Budgeting is all about being realistic especially when considering large purchases.


Buying your dream home is something most of us want to achieve at some point. The problem is being able to walk away from you dream home if it just costs too much. Too many of us are unrealistic in the way we approach large purchases and neglect the lasting impact it can have on our financial health.


Be realistic when you spend, and be realistic when you budget.


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