Meyer de Waal, founder of Mobile2Budget – a mobile application aimed at taking the pain and hassle out of budgeting – says the following are the most common financial mistakes people make:
– The biggest mistake is not budgeting at all.
– Not having a proper budget planner, so not capturing each expense.
– Not taking into account smaller expenses that eat away at budgets.
– Trying to work out debt repayment without professional assistance.
– Not taking into account unforeseen expenses.
– Not allocating money towards savings.
– Not using windfalls constructively – they should be used to pay off debt, instead of shopping sprees.
How to budget correctly
– Always make provisions for savings and try to cut out all “nice to haves”.
– Speak to and learn from others – particularly those in the financial industry.
– Find an easy way to capture and record your expenses. It’s best to capture each expense as it happens. Try an Excel spreadsheet.
– Compare your budget to the expenses you had over the past few months and adjust it accordingly.
– Be honest with yourself when it comes to your expenses and always distinguish between “must haves” and “wants”.
– Be more conservative with your spending and more liberal with your savings.
– List all your monthly necessities, as well as your monthly luxuries. Once you make this distinction, you will be able to identify which of the luxuries you would be able to cut out to increase your savings.