A common mistake that many people make when budgeting is failing to realize where their hard earned money is going in the first place. Consider these common mistakes below to get a handle on your finances.

Not Knowing Where Your Money Is Going

You Need A Budget

An application popular for its sleek design and ease of use is ‘You Need A Budget‘. This application takes you from buying items based on your mood, to buying based on an actual plan. They have four different methods to help people get on track with their finances:

  1. Create spending categories for everything! For example, if you set aside $50 for ‘Eating Out’ each week, then stick to it. No more overdraft fees from overspending!
  2. Review your large, less frequent bills in advance and break them into manageable monthly amounts.
  3. If you overspend, acknowledge it, and then move over some surplus money from one account to another. Make adjustments as necessary.
  4. Plan all your bills in advance and can even set-up autopay. You can plan for your next vacation without any financial worries.

You can try “You Need A Budget” free for 34 days!

Other Money Management Apps For Grabs:

  • Wally – A free app designed to help you visually compare your income to your expenses so you can achieve realistic goals.
  • Mint – An incredible app for keeping track of your bills and seeing your money in one place. Mint will send you alerts regarding upcoming bills and missed payments. It also gives you a free credit score!

Not Having The Right Type of Budget

The ‘I’m A Survivor’ Budget

When you’re trying to get on your feet, sometimes it’s difficult to think in terms of savings and debt when all you have is what’s in your wallet. If this is the case, then consider the envelope method. When you get paid, create and label several envelopes with categories like rent, electricity, food, and more. You’re only allowed to spend what’s available in each category until you get back on your feet.

The Perfect Plan For the Salaried Budget

If you’re salaried, then the easiest and fastest way to accumulate more money may be this approach. You’ll want to do the following:

  • Only spend 50% of your earnings on needs (e.g. bills, food, rent)
  • Only spend 30% of your earnings on wants (e.g. dining out, shopping, etc.)
  • Spend 20% of your earnings on financial goals (e.g. reducing debt, retirement, etc.)

The Financial Freedom Budget

If you’re quite financially secure but interested in growing your money, then start setting aside a certain amount of finances…automatically! Achieve financial freedom by setting up an automatic transfer every time you get paid using an amount that’s comfortable for you. Don’t touch the money until you’ve reached your goal. Maybe you want to start a business, take an exclusive vacation, or save up for a home.