What makes people to overestimate in making financial budgets?

[Min George]

I see so many people make budgets that end up not being implemented because they overestimated on the income side. At the end of the day, the process of budgeting becomes a waste of time. Why do people always overestimate on the income side of their budgets?

 

[Trush Jodie]

For me, I believe it is wishful thinking and unnecessary positivity that makes them to overestimate their income.

 

[eLdavis]

There could be many reasons, i feel in most cases they tend to plan their budget on money that hasn't come in yet.

 

[Springtime]

I think it is wishful thinking. I am a freelancer. My income fluctuates every month. I will not overestimate my income.

 

[Kross]

People ought to use the lowest margins to do budget when they want to project their income. And the highest margin for expenses.

 

[Augusta]

Overoptimism, not prioritizing spending, and neglecting unexpected expenses also contribute to overestimation.

 

[King Belieal]

Overoptimism, not prioritizing spending, and neglecting unexpected expenses also contribute to overestimation.

That overoptimism is the primary reason why people always fail in budgets. I prefer to be pessimistic in my budgets. It helps the budget perform better.