2 Common Budgeting Mistakes That People Make.

[King Belieal]

When it comes to budgeting, people commonly make two mistakes that can be detrimental to their budget being effective.

The first mistake is over estimation. And this always happens with our income. We are not realistic about our income. We often tend to overestimate our income. We should always use our minimum possible limit to determine our projected income.

And then, the second mistake is under estimation. We often underestimate our expenses. We intentionally reduce our expenses in our budget to make it look good. In budgeting, use highest upper limit for estimating expenses.

 

[Augusta]

You are right we just have to strike a balance when we are creating our budget. Don't overestimate or underestimate so that you get things in the right perspective.

 

[eLdavis]

When it comes to budgeting, I always make sure I find out the exact cost for my expenses before setting a budget for it.

 

[Fidelia]

Even when I find out the exact costs, I make it like 20% higher than that cost and budget at that level. That protects me from any shocks that might happen suddenly in the market price of that product.

 

[Starmix]

It's best to estimate to advance our goals. The estimation must suit to what you're estimating about. It's a disaster if do overestimating, you'll lose.

 

[freelancermaria]

When it comes to managing finances, maintaining a balanced budget is essential. It is imperative to ensure that you allocate your resources in a way that allows for flexibility and minimizes the risk of making errors that could have negative consequences in the long run.

 

[Suba]

If we look seriously, we will find many common mistakes in budgeting such as:
1. Excessive projection of profits.
2. Ignoring budget requirements completely.
3. Assume earnings will be cash flow positive.

In personal budgets, we also often encounter common mistakes that are often repeated, such as:
4. Eliminate entertainment funds
5. Don't have an emergency fund.
6. Lazy/forgetting to update the budget.
7, Not Investing in Yourself

 

[Augusta]

You budget on money you are yet to receive. This is a recipe for easy disaster which is unwarranted

 

[King Belieal]

The thing is that whether you mistakenly overestimate or underestimate, it would always affect the budget and it's implementation negatively.

 

[Starmix]

Budgeting is the hardest thing to do especially when there's an emergency. Your budgeting will be affected if there's no emergency budget.

 

[Suba]

In fact, preparing a company budget and a personal budget is not much different, only the company budget will be drafted and approved by the company director. Mistakes will occur frequently and over time, which is why it is necessary to revise or update the budget.

 

[Starmix]

In my workplace there's always budget approval by the national government for salary increases, bonuses, and budget for the new recruits. If there's no budget , salary increase remains stagnant.

 

[Suba]

In my workplace there's always budget approval by the national government for salary increases, bonuses, and budget for the new recruits. If there's no budget , salary increase remains stagnant.

Usually the preparation of the budget will also be adjusted to a country's inflation rate, if the inflation rate is 5% then the budget will also be increased by around 5%, both operational costs and employee salaries.

 

[Starmix]

That might be the reason why our salary increase despite already notarized didn't take effect for two years now. It's so annoying.

Post automatically merged: May 7, 2024

That might be the reason why our salary increase despite already notarized didn't take effect for two years now. It's so annoying.

 

[Augusta]

Yes, don't overestimate your budget just try to have a clear understanding of what you are working with before you start budgeting

 

[Starmix]

Budgeting might be out if order in this crucial time when only a very few can do this . What to budget when the earning is too small?

 

[Suba]

When preparing a company budget, I often use historical data over several accounting periods. We also have to pay attention to economic changes, which is why budget estimates are never always correct and there will always be "Over or Under" also known as favorable and unfavourable. That is, the budget needs to be revised or updated.

 

[Starmix]

I only do simple budgeting for expenses at home and for myself, and since I have now a small business, I do budget the expenses to incur and how much to save.

 

[Augusta]

Budgeting for things is the best because it is always a lot easier to get what you want.

 

[Starmix]

Over and under estimations are crucial. Regarding over estimation, what makes it crucial is when the budget isn't enough while the underestimation, there might be lapses when the estimated cost for example doesn't match with the intended budget.