Are You Guilty of These Personal Budgeting Mistakes?

The topics that are close to everyone's heart are financial
freedom, financial security, lifestyle and spending habits.
In life, however, you are left to gain this knowledge on
your own, often through trial and error, since these skills
were not taught consistently in your schooling. If you can
understand these common mistakes folks make, then it may
save you financial heartache and headaches later on. They
are outlined below:

#1. Expenses Outstrip Your Income.
This mistake would have to be the major cause of worry to
many, many people suffering under the load of financial
hardship. Whose money do you think you are spending, if you
are making this mistake? That money is coming from banks
and credit providers and the cost of this service is
interest. This could be the cause of your problems now.
Helpful Hint: Spend less than your income. Try to think of
ways to save money at every opportunity - not spend. See
how much you can buy for your money. Make it stretch as
far as possible.

#2. Paying for Large Purchases on Credit.
You will never get ahead financially if you continue to
purchase new expensive assets such as TV, Video,
Refrigerator or lounge and dining settings on credit. Their
value reduces as soon as you purchase them, but the
payments continue, often long after the asset's life has
ceased. In addition, the cost of interest is also added.
Helpful Hint: Save for these purchases by putting aside
some funds each payday.

#3. Buying Sale Items You May Not Really Need
Do you think that businesses would be successful if they
spent their scarce resources on every new invention or
"must have" new technology? Would they be profitable if
they bought up a heap of raw materials on a whim without
thinking through the strategy first? This is what you are
doing, in effect, if you buy at the sales just for the sake
of grabbing a bargain. Next time you are at a sale, ask
yourself whether you REALLY need the item first.
Helpful Hint: Only pass over your cash once you are
convinced it is in your best financial interest to purchase
the sale item.

#4. Not Thinking of Ways to Increase Your Earnings
Even though you may have a steady 9-5 job it does not mean
that you should not look at ways to earn more. Why not try
these?
- Think of ways to make your hobby pay for itself.
- Why not sell other peoples products on the Internet for a
fee? You don't even need you own website.
- Get your resume sharpened up and ready for the next
interview.
- Make yourself more valuable by learning new business
skills.

#5. Forgetting the Goldmine of Unused Items in your House.
You would be surprised at all the unused items that are
sitting around your house and in the garage. People will
pay good money for unwanted items. Why not sell them at
your local weekend markets? The money you receive will be
very welcome.

#6. Looking Enviously at Others' Lifestyle.
Why try to compare yourself with others when you don't know
their financial situation? They could be in a worse
financial situation than you are. Look only at your needs
and lifestyle and be content with your circumstances.

#7. Spending All You Earn.
If you live day by day, you will never get ahead,
financially. Think about it - by just saving $50 each week,
that's $2,600 a year! Why not do without the bought lunch
and the magazines. That's enough for a real holiday or the
beginnings of a retirement fund.

#8. Forgetting to Set Up a Personal/Family Budget
This is a big mistake. You must do things differently if
you want the outcome to be different. Setting up and
sticking to a budget will take a bit of effort, but in the
end, it's worth it. Financial security, spending freedom,
debts under control, holidays and more happiness can be
yours.

These are some common financial mistakes. If you wish to
avoid them take note of the solutions. All you need is a
little effort and some good tools. Why not make a start
today? You'll be so glad you did.

Bruce Hokin has designed a simple budget tool called "5 Steps to Freedom Personal Budget." It based on his extensive background as a qualified, experienced accountant, manager, consultant and financial adviser. You can download this powerful budget assistant today and be on your way to financial freedom within the hour. You can also click here for your FREE Mini-Budget.